The leverage in futures market is also called leverage principle, which is one of the trading principles in futures market. Speculators can control a large amount of commodity funds with less money. Futures trading only needs to pay margin, and the amount of margin only accounts for a small proportion of the contract amount. Speculators can do bulk futures trading by investing a small amount of principal and paying a deposit. If a trader buys a soybean futures contract (5000 bushels) at a price of 6.5 USD per bushel (the total value of each contract is 3%), the required margin may be 3000 USD, accounting for about 9% of the total contract value, so the trader controls the futures contract with a total value of margin 10 times with little money. Therefore, the futures market has attracted many speculators. At the same time, speculation in the futures market is risky and profitable. Small changes in futures prices can make some speculators get huge profits after accurate forecasting, while others suffer a lot of losses because of wrong forecasting.
The international financing multiple or leverage ratio is between 20 times and 400 times. The standard contract in the foreign exchange market is 6,543,800 yuan per lot (referring to the base currency, that is, the previous currency of the currency pair). If the leverage ratio provided by the brokerage firm is 20 times, the buyer and the seller need a deposit of 5,000 yuan (if the transaction currency is different from the account deposit currency, it needs to be converted); If the leverage ratio is 100 times, the buyer and the seller need a deposit of 1000 yuan. The reason why banks or securities firms dare to provide a larger financing ratio is because the daily average fluctuation of the foreign exchange market is very small, only about 1%, and the foreign exchange market is a continuous transaction. Coupled with perfect technical means, banks or brokers can completely resist market fluctuations with less margin from investors without taking risks themselves. Foreign exchange margin is a spot transaction, which has some characteristics of futures trading, such as buying and selling contracts, providing financing, etc., but its position can be held for a long time until voluntary or compulsory liquidation. Foreign exchange margin is the freest, fairest and most advanced trading method in all financial markets in the world today.