Glossary › leverage cap

Trading glossary · markets

leverage cap

A limit on how much borrowed money you are allowed to use, set by the market's rule keepers or by your own rules.

The fuller meaning

A maximum leverage, set by regulators or in a personal rulebook. Retail forex caps are up to 50:1 on major pairs in the US, 30:1 in the UK and EU and 25:1 in Japan, while India allows rupee currency derivatives only for hedging. Experts treat the cap as a ceiling, not a target.

leverage cap.

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