Do I have to pay back my leverage on the Avatrade Trading Platform?

You can compare leverage to borrowing money in order to purchase an automobile or a house. If you do not have enough capital, you get a loan to execute this transaction.

Put simply, when you leverage, you will borrow cash from the broker. You must pay back the money.

The process works like this: If you have $1,000 to invest and you want to buy a stock for $100 per share, you can buy ten shares. When you leverage, you may want to borrow another $1,000, so you would increase your positions to 20 shares. This gives you a leverage ratio of 2:1.

You get to keep the profits on the leverage, but you must repay the principal you borrowed.

Your possible profit is greater, but so your potential loss.