A common misconception among new traders is that leverage is only available in forex, and that it doesn’t apply to markets like indices or crypto. This has led to the myth that leverage is exclusive to forex trading, when in reality, leverage is widely available across multiple asset classes — including indices, cryptocurrencies, commodities, and even stocks. The difference lies in how leverage is offered, regulated, and managed across each market.

This article clears up the confusion and explains how leverage works across various markets, helping you make informed, strategic use of it — no matter what you trade.

Why the myth exists

1. Forex brokers market leverage heavily
Forex trading is often promoted with phrases like “Trade with 500:1 leverage” or “Open with just $50,” creating the impression that only forex offers this feature.

2. Crypto leverage isn’t available on traditional platforms
Centralised crypto exchanges and decentralised protocols offer leverage differently from regulated brokers — leading to confusion for traders moving between asset classes.

3. Index trading seems slow and institutional
Since major indices like the S&P 500 or FTSE 100 move in smaller daily ranges than volatile forex pairs or altcoins, many assume they’re unleveraged.

4. Lack of understanding around margin products
Traders often confuse leverage with margin requirements, not realising that contracts-for-difference (CFDs), futures, and options all involve leverage across markets.

The truth: leverage is everywhere

1. Forex

• Most brokers offer up to 30:1 for retail traders under regulated entities (FCA, ASIC, CySEC).
• Offshore brokers can offer up to 500:1 or more, though often with greater risk.

2. Indices

• Index CFDs (like US30, GER40, UK100) are commonly traded with leverage — typically between 5:1 and 20:1 depending on the broker and regulation.
• Futures contracts on indices (e.g. S&P 500 futures) also offer leverage via margin deposits — with control over large exposure using smaller capital.

3. Crypto

• Major exchanges like Binance, Bybit, and Kraken offer leverage from 2x to 125x depending on the asset.
• Decentralised platforms like dYdX and GMX offer on-chain leveraged crypto trading.
• Leverage is integrated into perpetual swaps, margin accounts, and futures.

4. Stocks

• While traditional investing is unleveraged, margin accounts allow traders to borrow capital (typically 2:1 leverage) in regulated markets.
• Stock CFDs allow 5:1 to 20:1 leverage depending on broker and jurisdiction.

Examples of leverage in action

Benefits and risks of using leverage

Benefits:

• Control larger positions with smaller capital
• Increase ROI on small price movements
• Diversify across more instruments

Risks:

• Losses are magnified along with gains
• Margin calls or liquidations can occur rapidly
• High leverage without discipline leads to blown accounts

How to use leverage wisely across markets

• Start with low leverage (2x–5x) and scale up only with experience
• Use stop-losses to define risk per trade
• Avoid using full margin — always leave room for volatility
• Adjust your leverage based on asset class volatility (e.g. crypto needs lower leverage than forex)
• Understand platform-specific liquidation rules

Conclusion

Leverage is not exclusive to forex — it’s a universal trading tool available across indices, crypto, stocks, and more. The key isn’t whether leverage exists — it’s how you use it. Each market offers different leverage levels, risk dynamics, and tools — and success comes from knowing how to apply them with strategy and discipline.

To master how to trade with leverage across multiple markets — safely and effectively — enrol in our Trading Courses at Traders MBA, where risk is controlled, not feared.