What is gearing and how exactly are contracts for difference (CFDs) used to gear a portfolio? In this short video, Simon Brown explains the relationship between your exposure and margin. He also explains how a share price movement will impact a geared portfolio and the risks involved in taking a geared position. He talks about how changes in liquidity, volatility, position size or share price could result in an increase or decrease in your margin while your trade is open.
To get some more practical tips on using gearing in your trading portfolio, watch this video on putting together your own trading plan.
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