IC Markets
A broker advertises "up to 1:500", you open an account, and your gold trade behaves as if leverage is 1:40. Nothing is broken. The headline figure is a ceiling that applies only to specific instruments under specific conditions. Several rules sit underneath it, each capable of reducing your effective leverage. This guide lists them.
1. The instrument
Maximum leverage varies by asset class. A broker offering 1:500 on major currency pairs typically offers much less on more volatile instruments: 1:20 to 1:100 on gold and indices, 1:10 to 1:50 on exotic pairs, and lower still on single stocks and crypto. The 1:500 headline usually refers only to major forex pairs. Check the instrument specification for its own maximum.
2. Your jurisdiction
| Regulator / region | Retail leverage cap on major FX | On gold |
|---|---|---|
| EU (ESMA) and UK (FCA) | 1:30 | 1:20 |
| Australia (ASIC) | 1:30 | 1:20 |
| Many offshore jurisdictions | 1:500 to 1:1000+ | 1:100 to 1:500 |
If you signed up through a regulated entity in the EU, UK or Australia, retail leverage is capped by law regardless of the broker's global marketing. The high numbers are only available through offshore entities, and some brokers route clients to those entities specifically to offer higher leverage.
3. Your account type and equity
- Some brokers offer higher leverage only on certain account tiers.
- Many brokers apply a tiered system where leverage falls as your account equity rises: 1:500 up to USD 20,000 of equity, 1:200 from USD 20,000 to USD 100,000, 1:100 above that. A growing account can quietly move down a tier.
- A professional-client classification can lift caps, but it removes retail protections such as negative balance protection and requires you to meet experience and asset criteria.
4. Market conditions
Brokers reduce leverage, meaning they raise margin requirements, on volatile instruments around major news and over weekends. Your 1:500 on an FX pair might become 1:200 for the hours around an FOMC decision or from Friday afternoon to Monday. This is disclosed in the terms and is temporary.
Marco could not understand why his account behaved like 1:30 when the broker advertised 1:500. He had signed up through the broker's Italian entity, which is regulated by CONSOB under EU rules, so his retail leverage on EUR/USD is capped at 1:30 by law. The 1:500 was only available through the broker's offshore entity, which does not accept EU residents. That cap was regulation, not the broker holding out on him.
How to find your actual leverage
- Check the account details page for the account-level leverage setting, which is the ceiling for that account.
- Open the instrument specification for the symbol you want to trade and read its own maximum leverage or its margin percentage.
- Note which broker entity your client agreement names, and look up that entity's regulator to see if a legal cap applies.
- For a specific trade, place a small test order and check the margin the platform reserves against the position's notional value; margin divided into notional is your effective leverage on that trade.
- Around big news weeks, check the broker's announcements page for temporary margin changes.
Higher leverage is not a feature to chase. Your position size should come from your stop distance and a fixed 1 per cent account risk, which almost always sits far below the maximum position your leverage allows. If a broker's main pitch is leverage, that tells you more about the broker than about your trading.
The advertised leverage is a best-case number for one asset class in one jurisdiction. Your real number is the lowest cap that applies: the instrument's limit, your jurisdiction's legal cap, your equity tier, and any temporary reduction around news. Check the instrument specification for its own maximum and check which entity you actually signed up with.
Frequently asked
Why is my forex leverage lower than the broker advertised?
The advertised figure is a maximum for major currency pairs under normal conditions. Your effective leverage is capped by the instrument (gold and exotics are lower), your jurisdiction's legal limit, your account tier and equity, and temporary reductions around news and weekends.
Why is my leverage only 1:30?
You likely signed up through a broker entity regulated in the EU, UK or Australia, where retail leverage on major currency pairs is capped at 1:30 by law and 1:20 on gold. The higher advertised numbers are only available through offshore entities.
Does my leverage change as my account grows?
It can. Many brokers use a tiered system where the maximum leverage falls as account equity rises, for example 1:500 up to USD 20,000 and 1:200 above that. A growing balance can move you down a tier automatically.
Can I get higher leverage as a professional client?
Professional classification lifts the caps but removes retail protections such as negative balance protection, and you must meet criteria on trading experience, portfolio size and industry background. For most traders it is not worth the trade-off.
Should I want the highest leverage available?
No. Position size should be set from your stop distance and a fixed account risk, which usually sits well below the maximum the leverage allows. Higher leverage mainly increases the speed at which a mistake becomes an account-ending loss.