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Its called using leverage or buying on margin, but putting it simply they take out a loan.

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10y ago

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Leverage enables currency traders to do what?

Currency traders use leverage (or borrowed funds) to trade financial assets (currency). Leverage allows an individual to control larger trade sizes in order to gain a greater profit on their investment.


Which of the following best explains how currency traders can buy large amounts of currency with little money up front?

They buy on margin to provide leverage for a large purchase. They borrow money from their broker in order to make a larger currency purchase.


Currency traders buy on margin so they can do which of the following?

Make large currency trades using small amounts of money.


Leverage enables currency traders to which of the following?

Make large currency trades using small amounts of money APEX:)


What best explains how currency traders can buy large amounts of a currancy with little money up front?

Currency traders can buy large amounts of a currency with little money upfront due to the use of leverage. Leverage allows traders to borrow funds to increase their position size, enabling them to control a larger amount of currency than they could with their own capital alone. This practice amplifies both potential profits and potential losses, making it a high-risk strategy in the foreign exchange market. Additionally, margin accounts allow traders to maintain positions with only a fraction of the total value required.


What explains how buying on margin increase the leverage of currency traders?

borrowing money allows traders to make large purchases without a large amount of money up front.


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