Hello, in terms of leverage compared to the underlying futures or Forex contracts and the spread ranges compared to the typical contract movement:
Which Spreads have the best leverage and range in relation to uderlying margin and average movement?
Which Spreads are the worst deal in terms of leverage and range compared to the underlying margin and average movement?
Which Spreads are in between?
Thanks
Forex Spot is 50:1 in the US it can be as much as 1000:1 on a non NFA/CFTC regulated broker. Futures leverage varies by market and broker on day trading margins.
Both futures and forex captial requirements increase if there is a drawdown.
The amount put up on a spread is the margin and max risk.
Depending on what that risk is and the equalization ratio ie 1 spread = 1 mini lot of spot forex would define the leverage. If you put up $20 to control $10k (a mini lot) that is much better than the $200 you would have to put up to control a mini lot on spot forex USD/JPY 500:1 on the Nadex spread versus 50:1. on the spot forex.
In addition you have no chance of a margin call as the max risk is defined up front when using a Nadex spread.
Lower risk would mean higher leverage as lower risk means less money put up. The lower the proximity is the faster the spread will move as its traveling more at a delta of 1. You most likely want a spread with around 40% or more profit potential left in it unless your goal is premium collection and directional profit (something not possible on futures and forex).
Best leverage - you could say the ones that tick faster than the underlyhing US 500 NQ ZS ZB these tick in .1 and their underlying markets tick in .25
Least leverage - SI, HG, DAX, FTSE tick slower than the underlying market
The others ticks the same.
All this is covered in training materials on this site including a video about leverage comparison of spreads to underlyings ETF, vs Options, Vs Future, VS Forex, Vs Spread.
Hope these answers get you on the right path.
