When it comes to trading with a prop firm, there are a number of aspects to consider. One such aspect is the level of leverage the firm and its respective broker will offer the trader.
Whilst many institutional-level traders will typically use very low leverage, those trading with prop firms or retail brokers usually prefer a higher amount of buying power to maximize returns. For many traders, up to 1:10 leverage will be sufficient to achieve their trading goals, however for some strategies higher leverage may be needed. Some cases where higher leverage can be helpful include:
Scalping strategies – This involved making larger trades whilst aiming to make a profit from much smaller moves. Higher leverage here can be advantageous as it allows the trader to capitalize on those smaller price moves.
Trading multiple assets – Some traders like to have a number of trades opened at once. This is not very practical without sufficient leverage.
Trading low volatility markets – Similar to scalping, profits rely on smaller market moves. Since downside risk is lowered, increased leverage is useful to bring in more profits.
It’s important to remember, leverage is a double-edged sword. Whilst it can amplify gains, it also amplifies losses. That said, let’s take a look into what each firm can offer.
Quickview Table of Leverage by Top Prop Firms
In the table below I will outline how much leverage each firm can offer.
The table includes the maximum leverage offered by a firm. It does not imply this leverage is for all account types, which is covered in the “More Info” section. Another point to note, many firms only provide this level of leverage for forex markets.
Often, the leverage is reduced for indices, commodities, crypto and stock CFDs. It is advised to read the FAQ on the particular firm for more on this.