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Increasing investment capacity through leverage on the Darwinex platform

If as a DARWIN investor you have the leverage option enabled, there is a way to increase your investment amount in the event that you have a profitable open position in a given DARWIN.

By way of example, let’s assume that:

  1. We have €5,000 invested in a DARWIN,
  2. The open P/L is €1,000.
  3. The leverage employed is 2x.

If at this point we were to close our position, the platform would automatically retain €200 by way of performance fees.
Our unlevered investment capacity would then be equal to:

Our Initial Investment + Net P/L
i.e. €2,500 + €800 = €3,300

Using 2x leverage as previously, our available investment capacity is now increased to €6,600.

As such, we could reopen the same position:

i.e. €5,000 + €1,000 = €6,000

.. with €3,000, and still have another €600 left over to invest.

It is advisable to do this type of adjustment periodically in order to increase your investment capacity.
Remember however, that it is best to do this when the DARWIN does not have an open position in order to avoid generating unnecessary commissions.

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2 Comments

  • Jezza
    Posted June 27, 2018 at 3:32 pm

    “Remember however, that it is best to do this when the DARWIN does not have an open position in order to avoid generating unnecessary commissions.”
    What is the easy way to know whether a specific DARWIN has an open position ? Is there a flag somewhere ?
    Thanks

    • Post Author
      The Market Owl
      Posted July 10, 2018 at 11:37 am

      Hi Jezza! The best way to know if a DARWIN has open positions is to check its daily chart and see whether it is moving up and down or not. Alternatively, you can also take a look at its quote price. If it varies that means the DARWIN is trading at the moment. Best regards.

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Increasing investment capacity through leverage on the Darwinex platform - Darwinex Blog
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The Darwinex® brand and the http://www.darwinex.com domain are commercial names used by Tradeslide Trading Tech Limited, a company regulated by the Financial Conduct Authority (FCA) in the United Kingdom with FRN 586466, with company registration number 08061368 and registered office in Acre House, 11-15 William Road, London NW1 3ER, UK. and by Sapiens Markets EU Sociedad de Valores SA, a company regulated by the Comisión Nacional del Mercado de Valores (CNMV) in Spain under the number 311, with CIF A10537348 and registered office in Calle de Recoletos, 19, Bajo, 28001 Madrid, Spain.

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