What is the difference between Leverage and Margin requirement?

Leverage and Margin are similar in nature but state a different point of view.

Leverage intends to show someone’s Buying power with a given amount of Funds, while Margin states the Funds needed to open or sustain a position open.

Leverage – Example:

With a 1:100 Leverage and 1,000 USD in your balance, you can open a trade with a size of 100 times bigger than your balance.

In that case, you’re able to open a trade of 100,000 USD.

Margin – Example:

Margin is the amount needed in your balance to open a trade of a given Size.

So, if you want to open a trade of 100,000 USD with a margin requirement of 1%, you then need to have at least 1,000 USD in your balance.

Margin is stated as a percentage while Leverage is stated as a ratio, but they basically show the same thing.