Vantage is an Australian broker that offers maximum leverage of 1:500. Known for the efficiency of its services, it is one of the leading trading brokers. Forex affiliates and clients alike describe it as a broker of choice — a reputation it owes above all to its attractive leverage.
Leverage by Account Type
On the Vantage platform, three main account types are offered. The first is the Standard STP account, intended for clients taking their first steps on the financial markets. With this type of account, market access is simple and direct. In addition, the broker takes very little commission on trades. That is not really the case with the RAW ECN account, the second account type offered by Vantage. It is designed for more experienced traders who need institutional-grade liquidity. Here is a complete Vantage review.
Apart from these first two accounts, the Australian broker also offers the Pro ECN account. Reserved for industry professionals, the Pro ECN account lets traders trade international markets at the lowest cost. So if you are a wealth manager or an algorithmic trader, it is the ideal account for your trading. Spreads are ultra-tight and execution speed is impressive. Here is a table showing the minimum deposit required for each account, as well as its maximum trading leverage.
Deposit | STP Standard | RAW ECN | ECN PRO | Shares |
$200 – $20,000 | 1:1 to 1:500 | 1:1 to 1:500 | 1:1 to 1:500 | No leverage |
$20,001 – $100,000 | 1:1 to 1:200 | 1:1 to 1:200 | 1:1 to 1:200 | No leverage |
$100,001+ | 1:1 to 1:100 | 1:1 to 1:100 | 1:1 to 1:100 | No leverage |
Once you know the requirements of the different accounts, making the right choice can seem difficult. According to client reviews, the ideal account for enjoying the smooth experience Vantage offers is the RAW ECN account. First, the minimum deposit is not very high; second, it is the account that offers interbank spreads. In fact, RAW ECN was built to help clients enjoy a complete forex trading experience. It is also the account that offers the best value for money in the industry. Liquidity comes directly from major banks and institutions, with no spread mark-up.
If this topic interests you, also read “IG Markets Leverage” and “XM Leverage”.
Leverage by Regulator and by Market
For those still wondering, Vantage leverage is not set by the authorities of your country of residence. It is the broker’s regulator that sets the leverage cap it can offer. However, following the introduction of the ESMA rules, many French and European traders went looking for higher leverage.
This explains the mass migration of French traders to Vantage after the ESMA rules were adopted. Adopted in 2018, these rules require European brokers to cap their leverage at 1:30. They do not apply to Vantage in any way, since it is an Australian broker.
Regulator / Market | ASIC – Australia | FCA – UK | CIMA – Cayman Islands |
Forex | 1:500 | 1:30 | 1:500 |
Indices | 1:500 | 1:30 | 1:500 |
Commodities | 1:500 | 1:30 | 1:500 |
Energies | 1:500 | 1:30 | 1:500 |
Metals | 1:500 | 1:30 | 1:500 |
Shares | 1:500 | 1:30 | 1:500 |
- 1:500 in Australia under ASIC regulation
- 1:30 in the United Kingdom under FCA regulation
- 1:500 in the Cayman Islands under CIMA regulation
When trading with leverage of 1:500, the client only needs 1 euro to invest 500 euros in the market. As a result, the margins set by Vantage are relatively low.
The Risks of Leverage
It cannot be said often enough: trading with leverage at Vantage multiplies the size of your position. That means bigger gains, but also bigger losses. Because of this last point in particular, leverage as high as 1:500 is not recommended for beginner traders. The worst case is accounts that do not benefit from negative balance protection. Without it, a trader can lose their funds and end up owing money to the broker.
The risks of leverage are numerous. Take the example of a trader hit by a gap while holding a large open position. Their position will be closed out on a margin call and they will be forced out of the market. Their funds will be lost, as will the broker’s.
However, traders who trade with ESMA-regulated brokers benefit from mandatory negative balance protection. In other words, they can never lose more than the initial capital invested. Leverage at Vantage is therefore a double-edged sword. It can certainly help you achieve incredible profits, but it can also ruin you completely.
Specifically, the role Vantage leverage plays in your trading is to multiply the size of your positions. When you choose leverage of 1:100 with a broker, for example, it means your investments will be multiplied by 100. For example, if you take a €1,000 trade, the broker multiplies that amount by 100, i.e. €100,000. A great situation for experienced traders. Other brokers offer leverage of up to 1:500. That is the case with Vantage, where you can multiply the size of your positions by 500. So when you take a €1,000 position, Vantage puts €500,000 into the market for you.
How to Change Your Leverage
Leverage can be changed either at the client’s initiative or at the broker’s initiative.
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Leverage is usually set automatically when you sign up. Once registration is complete, the trader can change leverage if the level assigned does not suit them. To do so, they need to log in to their account and select the “Change leverage” option in the settings.
Change Initiated by the Broker
Like other brokers, Vantage has the ability to change Vantage leverage, with or without the user’s consent. This kind of intervention can happen when the client or the broker is exposed to serious danger. The leverage ratio is then lowered either on all positions or only on some. However much you want to increase your account’s leverage, there is a maximum set by the broker that you cannot exceed. If you trade with an ESMA-regulated broker, for example, your maximum leverage is 1:30. However, this restriction does not exist at Vantage, which offers leverage of up to 1:500.
When Does Leverage Turn Into a Sledgehammer?
Put simply, leverage can be defined as taking on debt to supplement insufficient capital in order to carry out a transaction. In other words, a financial intermediary lends money to an investor so that they can make an investment.
If the transaction succeeds, the investor receives not only the gains generated by their own funds, but also those produced by the borrowed resources. In that situation, the investor sees their gains multiplied.
On the other hand, if the investment fails, the investor bears the loss of their own funds on the one hand. On the other, they also bear the loss of the funds borrowed from the broker, to whom they become indebted. At that point, leverage turns into a sledgehammer and the investor sees their losses multiplied.
How to Use Leverage
To protect themselves against the risks of leverage in trading, experienced traders rely on money management — in other words, risk management. To manage risk properly in trading, you must know the margin used in the position.
You should also set a target and a stop-loss (SL). The SL determines the maximum loss at which the position will close automatically. This lets you plan ahead for the loss of capital. It also prevents the risk of your position being closed by the broker with a zero balance.
On the maths side, there is a basic risk management rule. For example, no trader should ever invest more than 5% of their capital in a single position. However, this rule is no guarantee against the risk of losses. In reality, to use Vantage leverage well, several factors need to be taken into account. You need not only solid capital but also an effective trading style. It is also essential to have a moderate appetite for risk.
In addition, experienced traders often use techniques to maximise their profits with leverage. Scalpers, for example, generally target 5 to 10 pips. As a result, they need to use high leverage to bank worthwhile profits.
Swing trading enthusiasts, on the other hand, cannot use the same method. Since their target is longer term, they have to use low leverage. This allows them to hold the position even if unexpected reversals occur in the market.
What Are the Costs of Leverage?
At Vantage, leverage costs depend on the account type chosen, spreads, commissions and minimum deposits. For a Standard STP account, the minimum deposit is $200, leverage is capped at 1:500 and the spread is 1.4 pips. As a result, Vantage does not charge commission on this type of account. For the RAW ECN account, the minimum deposit is $500, maximum leverage is 1:500 and spreads start from 0.0 pips. Consequently, a commission of $3 is charged per lot per side.
For the Pro ECN account, the minimum deposit is $20,000, leverage can reach 1:500 and the spread is 0.0 pips. Here, a commission of $2 is charged per lot per side. So Vantage’s commissions range from $2 to $3, with spreads varying between 0.0 pips and 1.4 pips or more. That is a relatively low spread compared with other brokers of the same standing. However, the broker does not charge spread betting fees, as it does not offer this type of service.
Account types | Minimum deposit | Maximum leverage | Spreads | Commission |
STP Standard | $200 | 1:500 | 1.4 pips | $0 |
RAW ECN | $500 | 1:500 | 0.0 pips | $3 |
ECN Pro | $20,000 | 1:500 | 0.0 pips | $2 |
It is also important to note that these Vantage leverage costs are not the only fees charged by Vantage. There are financial instruments that traders can no longer trade beyond a certain time of day.
Once that time has passed, the session is closed and additional Vantage leverage fees apply to positions held at that moment. In addition, the broker charges overnight or swap fees. Also known as rollover fees, these are charged on positions that have remained open for more than 24 hours. Vantage leverage is higher than Interactive Brokers leverage.
Have you already used leverage in your trading? Share your experience with the community in the comments!