Leverage

Leveraged financing is a common practice in Forex trading, and allows traders
to use credit, such as a trade purchased on margin, to maximize returns.
Collateral for the loan/leverage in the margined account is provided by the
initial deposit. This can create the opportunity to control USD 100,000 for as
little as USD 1,000.
There are five ways private investors can trade in Forex, directly or
indirectly:
· The spot market
· Forwards and futures
· Options
• Contracts for difference
· Spread betting
Please note that this book focuses on the most common way of trading in the
Forex market, "Day-Trading" (related to "Spot"). Please refer to the glossary
for explanations of each of the five ways investors can trade in Forex.