We will illustrate this in detail below with an example: Once again, the index we want to trade is quoted at 10,000 points. A long knock-out certificate exists for the index. We therefore want to speculate on rising prices. The strike price is 9,000 points. The value of the leverage certificate is calculated as follows: The index is quoted at 10,000 points and the strike price is 9,000 points. The difference between these two values results in the value of the knock-out certificate, namely 1,000 €.
What are leverage certificates: If the index develops as we hoped and rises to 11,000 points, for example, this leads to a profit of €1,000. However, since we do not need €10,000 to trade the index, but only €1,000, we could theoretically also buy ten knock-out certificates. In this case, the profit would also increase tenfold to 10,000 €. However, this leverage is bought by the fact that the certificates become worthless if the index falls below 9,000 points. Leverage certificates therefore have a built-in "stop loss rate", so to speak. We therefore recommend, especially at the beginning, not to exhaust the leverage effect and rather to start with smaller positions.
How to buy leverage certificates
In addition to futures and leverage certificates, you can also use CFDs in Exness Asia to obtain leverage when trading. With many CFD brokers, 100 € or 200 € are sufficient to open an account for trading. Often you can also trade with so-called mini CFDs. This is especially interesting for beginners. Normally, a price change (for example in the DAX) in trading with a normal CFD means a plus or minus of 1 € on the trading account. With a Mini CFD, however, this value is reduced to 0.10 €. Therefore, you can train trading very well in this way.
Conclusion
It is also advisable to test trading with CFDs in advance on a free demo account. It usually only takes a few minutes to open an account and then you can start trading immediately. Instead of real money, you use a virtual credit on the demo account, which the CFD broker makes available to you. Often this amounts to 10,000 €. You can use this amount to get to know trading without risk. Many brokers nowadays support their customers with helpful training offers to learn trading. For example, it is recommended to watch trading videos and webinars. In this way, you learn how to use the trading platform and analyse the charts. In addition, you can often find good strategies in this way, which you can then apply yourself in trading. As soon as you have gained enough experience on the demo account, there is nothing to stop you from continuing trading with real money.
