Margin trading allows you to trade at about three times the amount, and when it comes to FX, you can trade at 400 times overseas and 25 times domestically.
As a reaction to this, it is true that many traders are being hunted down.
At least in the case of margin trading such as margin trading, spot trading is not done.
However, you deposit your investment funds with a securities company with a conflict of interest, and your position information is also exposed.
In the case of margin trading, if you deposit 1 million yen, you can trade 3 million yen.
In other words, your profits will be three times as much, but your losses will also be three times as much.
Let’s say a trader deposits 1 million yen with a securities company and “short sells” 300 shares of stock A, which has a share price of 10,000 yen.
The securities company has 1 million yen in deposit from the trader, so let’s say it buys 1 million yen worth of stock A in spot trading.
As a result, if stock A rises to 10,005 yen, the trader will lose 1,500 yen instead of the original loss of 500 yen.
The securities company can use the trader’s funds to make a profit of 1,500 yen even if the trader incurs a loss of 500 yen in spot trading.
This is the reaction of leverage.
Because FX is a currency exchange, banks can move the exchange rate in a sense endlessly.
Moreover, because positions are shared between banks, the overall picture goes against public psychology for stocks with a lot of margin trading and FX.
This is a natural principle.
