Interactive Brokers Leverage

Interactive Brokers operates numerous entities. The regulators in each jurisdiction determine Interactive Brokers’ leverage, which impacts its competitiveness. In my review, I evaluated the Interactive Brokers leverage conditions across nine entities. Find out how the regulatory restrictions influence your trading, learn the pros and cons of the Interactive Brokers leverage conditions, and use my conclusions to make an informed decision for your portfolio and trading requirements. I want to stress the importance of risk management and lot size management in leveraged trading, as these are the factors that determine risk, not the leverage ratio.

What Is Interactive Brokers Leverage?

Interactive Brokers leveraged trading grants traders a capital injection by decreasing the margin requirement to open and hold positions. For example, 1:50 leverage means that for each $1, traders can control a $50 position. It allows traders to control higher positions by borrowing capital from Interactive Brokers, for which the broker charges swap rates on leveraged overnight positions, increasing final Interactive Brokers fees per trade.

Regulation and CFD Leverage Limits at Interactive Brokers

The maximum Interactive Brokers leverage listed in the Interactive Brokers account types applies to Forex. Liquidity determines the maximum leverage for other assets.

Here are the regulation and leverage limits at Interactive Brokers:

1. Regulators: SEC (Securities & Exchange Commission)/ CFTC (Commodity Futures and Trading Commission, US)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:50

2. Regulator: CIRO (Canadian Investment Regulatory Organization)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:30

3. Regulator: FCA (Financial Conduct Authority, UK)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:30

4. Regulator: CBI (Central Bank of Ireland)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:30

5. Regulator: ASIC (Australian Securities and Investment Commission)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:30

6. Regulator: HSFC (Hong Kong Securities and Futures Commission)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:20

7. Regulator: SEBI (Securities and Exchange Board of India)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:50

8. Regulator: SDA/CFA (Securities Dealers Association, Commodity Futures Association, Japan)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:10

9. Regulator: MAS (Monetary Authority of Singapore)

• Compensation Scheme: Yes
• Maximum Forex Leverage: 1:20

All retail traders receive the following:

• Segregated client deposits from corporate funds
• Negative balance protection
• Automatic margin calls
• Forced liquidation below the margin close-out level

Interactive Brokers Leverage by Asset Type

During my Interactive Brokers review, I found that the leverage depends on the entity and asset type, and not all assets within an asset class qualify for maximum leverage. Traders can explore Interactive Brokers leverage in the Interactive Brokers demo account, and the trading platform lists the maximum leverage under contract specification.

Please note:

• Select jurisdictions, including the FCA, offer professional account upgrades with a maximum Forex leverage of 1:500 for qualifying traders

Can You Set Leverage Manually at Interactive Brokers?

Many brokers, including Interactive Brokers, allow traders to set their leverage manually, but it cannot exceed the maximum Interactive Brokers leverage determined by the asset type and regulatory restrictions.

How Do You Change Leverage at Interactive Brokers?

Traders can change their Interactive Brokers leverage from the secure personal area. Please note that the Interactive Brokers minimum deposit may apply for margin trading.

Here is how to change your Interactive Brokers’ leverage:

• Navigate to “Account Settings.
• Select your asset and set your preferred leverage from the available settings
• Press “Confirm.”

Interactive Brokers Leverage – Pros and Cons

I recommend traders consider the pros and cons of Interactive Brokers leverage, as they will impact margin requirements and influence the Interactive Brokers withdrawal.

The Pros of Interactive Brokers Leverage

• Negative balance protection
• Margin calls
• Automatic stop-out levels
• Reasonable swap rates

The Cons of Interactive Brokers Leverage

• The Interactive Brokers entity determines Interactive Brokers leverage

Bottom Line

Interactive Brokers maximum leverage ranges between 1:1 and 1:50. The leverage ratio depends on the asset, the Interactive Brokers entity, its regulator, liquidity, and the time of day. Interactive Brokers issues a margin call followed by forced liquidation should traders fail to meet the margin call. Negative balance protection exists in select jurisdictions.

FAQs

What is the margin on Interactive Brokers?

The margin depends on the asset and Interactive Broker leverage. It can range between 2% and 100%.

What is the maximum lot size in Interactive Brokers?

The maximum lot size for Forex traders at Interactive Broker is 50 lots or 5,000,000 currency units. Otherwise, Interactive Brokers has a maximum order size of 500,000.

How do you check leverage in IBKR?

Traders at Interactive Brokers can check the leverage of an asset by navigating to the quote details and scrolling down to the margin requirements.

How much margin can I get with Interactive Brokers?

The margin depends on Interactive Brokers leverage, with regulatory restrictions setting upper limits. Forex traders at Interactive Brokers have a maximum leverage of 1:50, resulting in a 2% margin. Equity day traders can use 1:4 leverage, giving them a 25% margin.

Does Interactive Brokers give leverage?

Interactive Brokers offers leverage between 1:1 and 1:50, depending on the entity, its regulator, and the asset.

By Tobi Amure

Tobi Opeyemi Amure has more than seven years of experience as a financial market analyst. He holds a Bachelor's Degree from Obafemi Awolowo University. Tobi's main area of expertise is in personal finance and the Forex industry. He has contributed to top platforms such as Investopedia, GoBankingRates, and Investing.com, where his expertise in Forex markets and digital assets is widely recognized. Tobi’s engaging storytelling and data-driven analysis have earned him a feature on Forbes and TheStreet, setting him apart as a trusted voice in Forex and online finance. In his free time, he explores emerging Forex trends, refines his market strategies, and actively engages with the global finance community.

Reviewer DailyForex.com Team

The DFX Team at DailyForex is a group of veteran financial analysts, traders, and brokerage industry experts dedicated to producing in-depth broker reviews and cutting-edge market insights, plus analysis of market trends. Holding over 16 years of experience in global financial markets, and 4 B.A. level academic qualifications in relevant degrees, we conduct thorough, unbiased evaluations of brokers to enable traders make informed decisions, using the most advanced methodology in the industry. Also, the DFX team is involved in generating technical analysis, signals, and trading strategies, with a consistent commitment to accuracy and transparency. Whether you’re a beginner or a professional trader, the DFX Team works to ensure you have the tools and insights you need to succeed as a trader in the retail CFD industry.

Fact-checker Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.