All shares products are subject to fixed leverage of 1 : 20.
． The principle of leverage
Investors can expand their positions by using leverage. For example, if an investor deposits US$ 1,000 and uses 100:1 leverage, the investor can hold a product with the nominal value up to US$ 100K. Since the client's actual assets are only $1,000, to avoid negative equity, when the equity is less than 50% of the used margin, the trading system will execute forced liquidation. Using high leverage means higher risk exposure, which magnify both potential profits and losses.
Compared with fixed leverage, flexible leverage is floating. NCE implements the rules of maximum flexibility and leverage to satisfy professional investors who want to use higher leverage under certain conditions. The maximum leverage is based on the client's current equity which is checked every 30 seconds-one minute.
． Leverage reduction
NCE recommends that investors who need high leverage can withdraw or transfer a certain percentage of funds to another account with the same name once leverage reduction is triggered.
． Leverage and trading profit / loss
New traders are easy to mistakenly believe that leverage will affect the results of trading profit / loss. Actually, open interest not the leverage matters. For two accounts with 1000:1 and 1:1 leverage respectively, trading the same product with same lots will end up with the same profit / loss.
． Negative protection
NCE strictly implements the negative protection policy, so investors do not need to repay the loss excess of own funds. Negative equity may happen easily during to excessive leverage especially when there is a gap in the market. If it happens twice in one month, the maximum leverage will be limited to 200:1 and it will return to normal level after 30 days.
． Leverage abuse
In response to the intention to obtain illegal profits by abusing the negative policy ,including but not limited to opening heavy positions inconsistent with the usual trading behavior before the weekly closing and the release of important data, the related accounts will be disabled. All consequences such as delay in withdrawals and even cancellation of profits will be borne by the unscrupulous trader.