What is Margin ?
It may be easier to understand if you think of the margin as a deposit for the trade that you want to open and maintain. The broker that you’re trading with will keep a portion of your balance to cover the potential loss of that trade. Once you close the position, the margin will be put back into your account.
The margin that you need for a trade is normally expressed as a percentage of the whole trade and is called the ‘Margin requirement’. You’ll be given a margin requirement for every trade that you open, and it will vary depending on the instrument that you trade and the broker that you choose to trade with.
What is leverage?
Theoretically speaking, leverage refers to the fact that traders have a large amount of disposable funds while using a small amount of their own funds. They can borrow the rest from their agents.
For example, if you trade with 1:100 leverage and you have $1000 in your account, you have $100000 to trade. While this sounds like a great opportunity, you must always remember that it's a double-edged sword.
When you trade at a larger amount, you can open a larger position and possibly make a larger profit due to leverage. However, the larger your position, the higher your risk and the greater your loss.