Forex glossary
Leverage caps
Scope: EU / Poland
Leverage caps limit exposure relative to minimum margin for a specified product and client class. Under the EU intervention model, 30:1 concerns pairs composed of two of USD, EUR, JPY, GBP, CAD or CHF. Poland's KNF decision has separate minima for qualifying experienced-retail clients; nationality alone does not determine account rules.
Illustrative example
How does it work in practice?
A hypothetical ordinary-retail offer limits EUR/USD to 30:1. A 30,000 EUR notional therefore requires about 1,000 EUR initial margin; actual exposure relative to equity requires a separate calculation.
A case to work through
Two currency lists
EU intervention model for ordinary retail clients: EUR/USD and AUD/USD are marketed as majors.
- Check the legal category using USD, EUR, JPY, GBP, CAD and CHF.
- EUR/USD meets it; AUD/USD does not because AUD is absent.
What follows? Check applicable national measures and the contracting entity’s terms.
Example boundary: This is an EU model category, not a global rule or Poland’s experienced-retail exception.
A useful distinction
Leverage caps / Leverage
Leverage can measure actual exposure relative to equity; a cap restricts the offer under applicable rules.
Check your understanding
Separate marketing categories from legal CFD categories.
Show the answer and explanation
No, the legal category must be checked
The retail and regulatory lists differ.
Entity, obligations and client protection
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Read the fuller explanation
Related terms
Sources and documentation
- ESMA Decision (EU) 2018/1636: temporary retail CFD restrictions
The historical ESMA decision renewed a temporary retail-CFD restriction model that included account-based margin close-out protection.
- KNF Decision No. DAS.456.2.2019 of 1 August 2019
The Polish decision defines initial-margin and account-based close-out requirements for retail CFDs, with separate conditions for experienced retail clients.
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The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.