Leverage Trading
The leverage is a powerful tool that allows you to get a larger exposure to the market than the amount you deposited to open the trade.
How does leverage work?
Leverage trading, sometimes referred to as margin trading, is a powerful tool for a trader and a key feature of the LOFT trading platform. It allows you to take advantage of small price movements, as well as negative ones, and hold a greater position size with the same investment.
The leverage is a multiplier for the deposit you used to open the trade, essentially you’re putting down a margin of the value of your trade while the rest is provided to you by LOFT. Our products allow traders to gain exposure to major markets, such as cryptocurrencies and forex, without tying up lots of capital.
You can use the leverage for both buying and selling an instrument, this allows you to profit from falling markets as well as those that are rising.
LOFT is an advanced leverage trading platform offering a wide variety of Bitcoin-based CFDs with added leverage and both buy and sell positions.
BTC/USD trade example
For example, you want to buy 10 Bitcoins at a price of $10,000.
To open such trade with a traditional exchange, you would be required to pay 10 x $10,000 for a position of $100,000 (ignoring fees). If the Bitcoin price goes up by 5%, your 10 Bitcoins are now worth $10,500 each.
If you sell, you’d have made a $5,000 profit from your original $100,000 investment.
1:100 leverage trade with LOFT
For example, you want to buy 10 Bitcoins at a price of $10,000.
In this case you'd only have to pay 1:100 (1%) of your $100,000 trade, or $1,000 to open such position. If the Bitcoin price rises by 5%, you would still make the same profit of $5,000, but at a considerably reduced cost.
Thanks to the leverage used in the trade, your profits have been greatly multiplied.
Normal trade
Leveraged trade
Benefits of using leverage
Multiplied profits
You only have to put down a margin of the value of your trade to receive the same profit as in a conventional trade.
Profiting from the market fall
Using leveraged products to speculate on market movements enables you to benefit from markets that are falling, as well as those that are rising.
Trading opportunities
Using leverage can free up capital that can be committed to other investments, allowing to diversify and enhance your trading strategy.
Trade and Invest
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