This is one of the most important concepts a trader needs to understand and is the backbone of CFD and forex trading. Leverage allows a trader to amplify their investment by only have to put up a small percentage of the value of the trade. The money needed to secure a trade is referred to margin. For example, when you open a position with a value of $10,000 by putting down a margin deposit of $1000 you have a gearing ratio of 10:1. Also known as leverage.