<h2>Operating Leverage</h2>
<p>Operating leverage, also known as financial risk, is a business strategy that uses borrowed funds to finance operations. It's a common practice in many industries, including Forex and CFD trading. By leveraging, businesses can control more assets than they could with their own funds alone.</p>

<h2>How It Works</h2>
<p>Operating leverage involves borrowing money to invest in assets, with the expectation that the returns from these assets will exceed the cost of borrowing. In the context of trading, this means using leverage to control larger positions than your account balance would otherwise allow. For example, with a leverage of 1:300, a trader with a $10,000 account can control a position worth up to $3,000,000.</p>

<p>Leverage is typically expressed as a ratio, such as 1:100 or 1:500. This ratio represents the amount of capital the trader can control for every dollar in their account. For instance, a leverage of 1:100 means the trader can control $100 for every $1 in their account.</p>

<p>In Forex and CFD trading, leverage is often provided by brokers like STB Provider. They allow traders to use their own funds as collateral, and the broker provides the rest of the funds needed to open a position. This is known as <strong>Non-Directional Trading (NDT)</strong> or <strong>Straight-Through Processing (STP)</strong>, where the broker acts as an intermediary, passing the trade directly to the liquidity provider.</p>

<p>MetaTrader 5, a popular trading platform, supports leverage up to 1:300 for retail clients. This means traders can control up to 300 times their account balance in a single trade.</p>

<h2>Why It Matters for Traders</h2>
<p>Operating leverage can significantly amplify both profits and losses. Here's why it matters for traders:</p>
<ul>
  <li><strong>Increased Profit Potential</strong>: With leverage, traders can control larger positions, which can lead to higher profits if the trade moves in their favor.</li>
  <li><strong>Leveraged Losses</strong>: Conversely, if the trade moves against the trader, losses are also amplified. This can lead to significant losses, including the loss of the initial margin used to open the position.</li>
  <li><strong>Margin Calls</strong>: When losses exceed the margin in the account, the broker may issue a margin call, requiring the trader to deposit more funds or close the position to prevent further losses.</li>
</ul>

<h2>Example</h2>
<p>Let's say a trader with a $10,000 account uses a leverage of 1:300 to open a long position on EUR/USD. The trader buys 100,000 units of EUR/USD, which would cost $125,000 at the current exchange rate. With a leverage of 1:300, the trader only needs to put up $416.67 as margin ($125,000 / 300). If the trade moves in the trader's favor by just 1 pip, the profit would be $12.50. However, if the trade moves against the trader by 1 pip, the loss would be $12.50.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>Operating leverage amplifies both profits and losses.</li>
  <li>Leverage is expressed as a ratio, such as 1:100 or 1:500.</li>
  <li>MetaTrader 5 supports leverage up to 1:300 for retail clients.</li>
  <li>Traders should be aware of the risks associated with leverage, including margin calls and potential loss of capital.</li>
</ul>