How leverage works on Trading212?

If you’re thinking about trading with Trading212, you’ve probably come across the term leverage. For beginners, leverage can feel confusing or even intimidating — but understanding how it works is essential if you want to make informed decisions and avoid unnecessary risks. This guide explains how leverage works on Trading212, the differences between Invest and CFD accounts, and how to manage the risks that come with using leverage.

What is leverage?

Leverage allows you to control a larger position with a smaller amount of money. In simple terms, it’s like borrowing money from your broker to increase your buying power. This means you can trade more than you actually deposit into your account.

For example, if you have $500 in your account and you apply 10:1 leverage, you can open trades worth $5,000. This can amplify your potential profits — but it also increases your potential losses.

Leverage is most commonly used in CFD trading, which Trading212 offers through its CFD account.

How leverage works on Trading212 CFD accounts

Trading212 CFD accounts are designed for short-term trading, and leverage plays a major role. When you trade CFDs (Contracts for Difference), you don’t actually own the asset — you’re simply speculating on price movements. Leverage allows you to open larger positions with a smaller deposit.

Example

Let’s say you want to trade Apple stock using a Trading212 CFD account. If the leverage for stocks is 5:1, that means:

• You only need $200 to control a $1,000 position.
• If Apple’s stock rises by 2%, you profit from the full $1,000 exposure, not just your $200 deposit.
• However, if Apple’s stock falls by 2%, you also lose based on the full $1,000 exposure, meaning your losses add up much faster than they would without leverage.

This magnified effect is what makes leverage both attractive and risky.

Leverage on Trading212 Invest accounts

In Trading212 Invest accounts, you’re buying actual shares or assets, not CFDs. That means no leverage is applied — you can only invest the money you actually deposit.

There’s an important exception for margin investing, which Trading212 has gradually started offering to some users. Margin investing allows you to borrow money to buy more shares, similar to leverage, but with more restrictions and costs. However, it’s much less common on Invest accounts, so most beginners using Trading212 Invest won’t encounter leverage.

Typical leverage levels on Trading212 CFD accounts

The amount of leverage you can use on Trading212 depends on the type of asset you’re trading and where you live. For retail traders in the EU and UK, leverage is capped under ESMA regulations. Here are the typical limits:

• Major forex pairs: Up to 30:1
• Minor forex pairs, gold, and major indices: Up to 20:1
• Other commodities and non-major indices: Up to 10:1
• Stocks: Up to 5:1
• Cryptocurrencies: Up to 2:1

In regions outside the EU and UK, such as parts of Asia, Africa, and Latin America, higher leverage may be available — sometimes up to 500:1 — but only if you qualify as a professional client.

Global and regional differences

Leverage rules on Trading212 vary depending on your location, account type, and trading classification.

• EU and UK traders are subject to ESMA’s retail leverage caps (maximum 30:1 on major forex pairs).
• Non-EU traders in some regions can access higher leverage (sometimes up to 500:1), especially if trading through Trading212’s non-European entities.
• Professional clients can apply for higher leverage limits, even in the EU and UK, if they meet eligibility criteria (like high trading volume or financial experience).

Always check which Trading212 entity you’re registered with, as leverage rules can change by jurisdiction.

Risk management — essential for leveraged trading

Leverage can amplify both profits and losses, so using proper risk management is essential, especially for beginners.

• Start with low leverage. Don’t max out leverage if you’re new. 2:1 or 5:1 can still magnify trades, but with less risk.
• Use stop-loss orders. Set a stop-loss for every leveraged trade to automatically limit potential losses.
• Monitor your margin level. Trading212 shows your margin level in real-time. If it drops too low, you’ll face a margin call and automatic position closures.
• Diversify trades. Spread your capital across different assets so no single trade can wipe out your account.
• Avoid overnight positions with high leverage. Overnight financing fees apply to leveraged CFD trades, so day trading helps avoid these extra costs.

Insights from real traders

On forums like Reddit’s r/Trading212 and Trustpilot, traders often share experiences about using leverage on Trading212:

• Beginners frequently overestimate how much leverage they can handle, leading to early margin calls and frustration. Many recommend practicing in the demo account first.
• Intermediate traders tend to adjust leverage based on asset volatility. For stocks, they may use 5:1, while they cut down to 2:1 for volatile forex pairs.
• Some traders criticize how quickly margin calls can happen, especially if they use maximum leverage with a small account size. They warn that even a 1% move against their position can trigger forced closures.

The general consensus: Leverage is powerful, but dangerous if you don’t fully understand how fast losses can spiral.

Summary

Leverage can be a valuable tool on Trading212, but only if used carefully. Start small, use protective stop-losses, and always keep an eye on your margin level. With the right approach, you can take advantage of leverage without exposing yourself to unnecessary risks.

---

FAQs

1. What is leverage on Trading212?
Leverage lets you trade larger positions with a smaller deposit, amplifying both profits and losses.

2. What is the maximum leverage on Trading212?

• 30:1 for major forex pairs (EU/UK retail clients).
• Higher leverage (up to 500:1) may be available to non-EU traders or professional clients.

3. Is leverage available on Trading212 Invest accounts?
No. Invest accounts do not offer leverage unless you have access to margin investing, which is only available to selected users.

4. What happens if I can’t meet margin requirements?
If your margin level drops too low, Trading212 automatically closes positions to protect you from losing more than your deposit.

5. Do leveraged trades cost more?
Leveraged CFD trades incur overnight financing fees if held past market close. These fees reflect the cost of borrowing.

6. Can I lower my leverage on Trading212?
No, leverage is set by asset type and regulatory rules, so you can’t customize it. However, you can lower your exposure by opening smaller trades.

7. Is leverage recommended for beginners?
Beginners should start with low leverage or no leverage at all until they understand how it affects both profits and losses.

8. Does leverage work the same on mobile and desktop?
Yes. Trading212 applies the same leverage rules across all platforms.

9. Can I practice with leverage in the demo account?
Yes. Trading212’s demo account lets you simulate leveraged trades, which is a great way to learn how margin and risk work.

10. How do I qualify for professional status?
Professional clients can access higher leverage if they meet criteria like experience, trading volume, and asset level requirements.