The Forex and CFD broker XM, a regulated online broker in Europe, has announced that from April 2023 it will increase the maximum leverage on all cryptocurrency CFD contracts. For the contracts of the most important cryptocurrencies such as Bitcoin and Ethereum, the leverage will have a maximum value of 1:500, which means that the margin requirement will be only 0.2%. This means that for a standard lot traded on Bitcoin CFDs, for example, the trader will need to provide an initial margin of just $200. For a minilot ($10,000) buy or sell trade, the margin requirement is only $20.
More information about the XM online broker and its Forex and cryptocurrency brokerage services can be found at: XM Broker Review
Leverage for less popular cryptocurrency contracts like COMPUSD and ALGOUSD is 1:50, which means a margin requirement of only 2%, which is also quite comfortable for crypto asset traders.
What are cryptocurrency CFDs?
CFDs or Contracts For Difference are unregulated OTC derivative instruments that allow you to speculate on the price of different assets, including currencies, stocks, and cryptocurrencies. CFDs are purely speculative instruments that do not provide ownership of the underlying asset traded but allow the trader to profit from the up and down swings of the market. In the case of cryptocurrency CFDs, the trader can speculate and earn money with the high volatility of these markets without having to buy and sell these assets directly, which avoids the usual complications of trading crypto assets, such as storing the purchased assets.
Advantages of cryptocurrency CFDs
XM cryptocurrency contracts offer the following features and benefits to the trader:
- Cryptocurrency CFDs can be traded 24 hours a day, 7 days a week. Unlike the Forex market, the cryptocurrency markets never close.
- CFDs on cryptocurrencies are swap-free financial products (overnight charges).
- Tight spreads with no requotes.
- Maximum leverage of 1:500 for the contracts of the most popular cryptocurrencies such as BTC and ETH.
- More than 30 cryptocurrency CFD contracts where the trader can speculate on the exchange rate between the main crypto assets and the main fiat currencies – USD and EUR.
For Forex traders, CFDs on cryptocurrencies are an attractive investment option that offers the possibility to diversify any portfolio with high volatility instruments that can generate high profits in a short time. The high leverage offered by this broker allows the trader to trade large volumes of crypto assets with little money, however margin trades must be executed with care, as a high level of leverage can magnify both profits and losses and lead to total loss of capital in a trading account.
More information about XM cryptocurrency CFDs and other XM services can be found on their website at: