Research Shows Interest in Leveraged Trading Has Begun to Rise as Recession Fears Take Hold

Research Shows Interest in Leveraged Trading Has Begun to Rise as Recession Fears Take Hold

New research carried out by Safe Trade Binary Options has shown a marked uptrend in interest in leveraged trading. A significant spike in searches in response to global events means that traders need to be increasingly aware of market shifts and sentiment and prepared to act with agility as the situation remains very fluid.

Safe Trade Binary Options continually monitors trader behaviors and trends. The data shows an explosion in the number of Google searches within the US for ‘forex brokers leverage comparison’. This peaked on June 22, 2022, with a maximum score of 100, before once again falling back to negligible figures.

Leveraged trading is an activity in which traders borrow capital from a broker, allowing them to obtain greater exposure to the forex market even with a relatively small deposit. In some markets, leverage can reach as much as 100:1, presenting an opportunity to trade up to $100,000 for every $1000 held.

Interest in leveraged forex trading typically occurs at times when the market is on a downward trajectory, as is being witnessed today amidst a landscape of war, supply chain constraints, and a growing threat of recession.

This, coupled with bitcoin dropping into bearish territory has triggered a widespread shift with the data showing traders are flocking to safety. Forex is the largest financial market; a market that’s worth US$2,409,000,000, with an average daily volume of US$6.6 trillion.

Emma Collins, CEO of Safe Trade Binary Options, says, “When there’s a lot happening on the economic front, as we are seeing right now with Wall Street bracing for a recession, it’s normal to see traders flock towards safe haven assets. The USD is one such asset, and so it’s not surprising to see growing interest in forex trading – and especially leveraged forex trading – at times such as this.

“However, the sharp unprecedented rise seen on June 22 provides deeper insights into today’s landscape. It reflects the increasing recession fears of the public, creating artificial and temporary demand for these high-potential, high-risk activities.”

Brokers typically require traders to have a minimum balance to act as collateral for the borrowed capital as a way to minimize their own risk. However, there can be significant risk for traders. By borrowing too much in a losing position – when markets are moving against the trader – losses on investments can be amplified as the losses are based on the full value of the trade – including the borrowed capital – rather than on the trader’s deposit.

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