Introduction
PipFarm dynamically reduces leverage, i.e. increases margin requirements, as your net exposure to each trading instrument increases. The dynamic leverage settings are grouped by asset class but are applied per symbol.
What is dynamic leverage?
Dynamic leverage is a margin calculation feature that dynamically decreases leverage based on exposure. The exposure tiers are calculated per symbol and are the same for all trading accounts. Accounts below 100k are unlikely to experience any dynamic leverage adjustments.
Dynamic leverage groups
Forex exposure tiers | Leverage (standard) | Leverage (extra) |
Up to $5M Approximately 50 lots of USDJPY | 1:30 | 1:50 |
Between $5M and up to $10M Approximately 50 lots of USDJPY | 1:15 | 1:20 |
Over $10M | 1:10 | 1:10 |
Metals exposure limits | Leverage (standard) | Leverage (extra) |
Up to $500K Approximately 1.75 lots of XAUUSD | 1:20 | 1:25 |
Between $500K and up to $1M Approximately 1.75 lots of XAUUSD | 1:10 | 1:10 |
Over $1M | 1:5 | 1:5 |
Indices exposure limits | Leverage (standard) | Leverage (extra) |
Up to $500K Approximately 25 lots of US 100 | 1:20 | 1:25 |
Between $500K and up to $1M Approximately 25 lots of US 100 | 1:10 | 1:10 |
Over $1M | 1:5 | 1:5 |
Oil exposure limits | Leverage (standard) | Leverage (extra) |
Up to $250K Approximately 6 lots of WTI | 1:20 | 1:25 |
Between $250K and up to $1M Approximately 6 lots of WTI | 1:10 | 1:10 |
Over $500k | 1:5 | 1:5 |
Crypto exposure limits | Leverage (standard) | Leverage (extra) |
Up to $100K Approximately 1 lot of BTCUSD | 1:2 | 1:3 |
Over $100K | 1:1 | 1:1 |
How is dynamic leverage calculated?
Dynamic leverage tiers are based on your net exposure of a symbol converted to USD. The table below shows our dynamic leverage tiers for trading precious with standard leverage.
Tier | USD exposure | Leverage (margin) |
1 | ⩽ 500,000 | 1:20 (5%) |
2 | ⩽ 1,000,000 | 1:10 (10%) |
3 | > 1,000,000 | 1:5 (20%) |
Suppose the price of XAU/USD is $3,000, and you open a 200 oz position. Your exposure is $400,000, which falls within tier 1. Therefore, the margin is calculated using 1:20 leverage, and the required margin is $30,000.
Suppose you open another 200 oz position of XAU/USD at $3,000 per ounce. Your total XAU/USD exposure increases to $800,000, which falls into tiers 1 and 2. The first $500,000 of exposure will use 1:20 leverage, and the remaining $300,000 will use 1:10 leverage, meaning the margin required is $55,000. Another way of looking at it is that the leverage for this position becomes 1:14.5.
Since this is applied per symbol, it won't affect the leverage the same for other instruments in the same asset class category.
What are the maximum exposure limits?
We set maximum exposure limits per symbol, which are categorised by asset class.
Instrument asset class | Maximum exposure limit |
Forex | $20M (Approximately 200 lots of USDJPY) |
Metals | $3M (Approximately 11 lots of XAUUSD) |
Indices | $2M (Approximately 100 lots of US 100) |
Oil | $1M (Approximately 13 lots of WTI |
Crypto | $500K (Approximately 5 lots of BTCUSD) |