The short answer
1:500 leverage means one dollar of margin controls five hundred dollars of currency, and it is the highest ratio a regulated broker will offer anyone. The catch is who gets it: brokers give 1:500 only to professional clients, while retail is capped at 1:30 by ESMA and can only reach 1:500 offshore.
The ratio sounds extreme next to the 1:30 retail cap, and in raw maths it is, because a 0.2% adverse move on a fully maxed position clears the margin. The honest framing is that 1:500 is a tool professionals rarely use at full size, not a goal for a retail account to chase.
I want to separate two things on this page that the marketing blurs together: what 1:500 means mechanically, and who can actually access it, because the answers point in opposite directions.
The wider context on leverage, margin and lot size is in the leverage hub, and this page covers the ratio that sits at the regulated ceiling.
What 1:500 leverage actually means
Leverage is the ratio between the position you control and the margin you deposit, and 1:500 sits at the top of what mainstream brokers list. At that ratio, the broker lends you 499 dollars for every 1 dollar you put down, and you trade on the full 500.
The margin maths is the inverse of the ratio, so 1:500 requires 0.2% of the position value as deposit. A standard lot of 100,000 units of EURUSD needs 200 dollars of margin at 1:500, and a 1,000-dollar account can command positions up to 500,000 dollars (FXTM).
That last number is where the danger hides for anyone who reads it as a target rather than a ceiling. A half-million-dollar position on a thousand-dollar account moves hundreds of dollars for every 0.1% shift in price, which is a routine intraday swing.
The 0.2% margin figure sounds small, and it is, which is exactly why it is dangerous in the wrong hands. A 200-dollar deposit controlling 100,000 dollars means a half-percent move in your favour nearly triples the deposit, and the same move against you nearly wipes it, and beginners notice only the first half.
I always convert leverage into position size before I judge it, because the ratio alone tells you nothing about risk. 1:500 is neither dangerous nor safe on its own, it is a margin setting that lets a small deposit hold a very large position, and the size is what does the damage.
Who can actually get 1:500
This is the part the marketing skips, and it is the single most useful thing to understand about 1:500. Regulated brokers offer 1:500 only to professional clients, while retail clients at the same broker are capped far lower.
FP Markets, for example, gives retail traders maximum forex leverage of 1:30 and reserves 1:500 for professional accounts, and the same split shows up across ASIC and CySEC-regulated brokers more broadly (FP Markets; ESMA). The retail ceiling exists because ESMA caps European retail major-forex leverage at 30:1, and the UK FCA matches it.
What that means in practice is that a regular retail trader in Europe or the UK cannot get 1:500 from any regulated broker, full stop. The 1:500 access the adverts point at is either professional status, which most retail traders do not qualify for, or an offshore broker outside ESMA and FCA rules.
That second route is the one to notice. Offshore brokers operating outside ESMA and FCA rules, such as FP Markets' global entity regulated by the FSA, do offer 1:500 to retail clients (FP Markets), which puts 1:500 in the same uncapped territory as 1:1000, covered in the guide to 1:1000 leverage.
Professional status is not a badge you buy, it is a legal classification with a high bar, and that bar is why most retail traders cannot simply opt into it. ESMA treats a client as professional only if they meet tests such as trading in significant size, holding a portfolio above 500,000 euros, or having worked in finance for at least a year, and most beginners meet none of those tests.
I treat the question of where the 1:500 is coming from as more important than the ratio itself. A regulated professional account at 1:500 is one thing, and an offshore retail account at 1:500 is a completely different risk, and they share nothing but the number.
The maths: a 0.2% move, twenty pips
The liquidation maths at 1:500 reduces to one figure, and seeing it next to the regulated caps is the whole warning. A fully maxed 1:500 position is wiped out by an adverse move equal to the inverse of the ratio, and the inverse of 500 is 0.2%.
| Leverage | Margin required | Adverse move to wipe margin | In pips on EURUSD |
|---|---|---|---|
| 1:30 (ESMA retail cap) | 3.3% | 3.3% | ~330 pips |
| 1:100 | 1% | 1% | ~100 pips |
| 1:500 (pro / offshore) | 0.2% | 0.2% | ~20 pips |
| 1:1000 (offshore only) | 0.1% | 0.1% | ~10 pips |
Twenty pips is a small move for a major pair, easily printed inside an active session's first hour. A maxed 1:500 account survives a smaller adverse move than a retail 1:30 account by a factor of roughly sixteen, which is the real cost of the extra leverage.
It is worth converting the 20-pip figure into time, because pips mean little without the clock. A major pair can print 20 pips inside a single economic-data release, often in under a minute, which means a maxed 1:500 position can be liquidated in the gap between the number printing and your reaction to it.
I have heard the gap between 0.2% and 3.3% sold as "more opportunity," and it is the opposite, because the smaller buffer is the one that liquidates you on a routine candle. The maths is not abstract, it is the distance between a bad day and a closed account.
Available leverage versus used leverage
This is the distinction that separates a professional use of 1:500 from a retail disaster, and it is worth slowing down for. The leverage a broker makes available is not the leverage a trader has to use, and the two numbers are almost never the same for anyone who survives.
A professional with 1:500 access still risks half a percent to one percent per trade, which means the lot they actually trade is a small fraction of the maximum the margin allows. The 1:500 ratio only changes how much cash sits on deposit as margin, not how much they risk, and the position is identical to one taken at 1:30.
The retail trap is to treat available leverage as a target, opening the largest position the margin permits. That is the exact behaviour the ESMA 1:30 cap exists to prevent, and reaching for 1:500 to get around it simply rebuilds the problem the regulator removed.
I set my position size from my risk per trade first, then check it fits inside the margin, never the other way round. Available leverage is a ceiling you stay under, not a level you fill up to, and that habit is the entire difference between the professional and the blow-up.
A worked example: $1,000 at 1:500
The distinction lands hardest with numbers, so let me run one. A trader puts 1,000 dollars into a 1:500 account and sizes from a 1% risk, meaning a stop loss of 10 dollars per trade.
At roughly ten cents per pip on a micro lot, a 10-dollar risk is a 100-pip stop on a single micro lot, which is a sensible, survivable position. The 1:500 leverage sits there unused, the trader is effectively near 1:10, and the account weathers an ordinary losing streak.
Now run the same 1,000 dollars maxed out at 1:500. The margin allows a position around half a million dollars, worth roughly fifty dollars per pip, and a 20-pip adverse move costs the entire account.
Same balance, same leverage setting, opposite outcome, and the only difference is whether the trader sized from risk or from the margin ceiling.
The reason the maxed account hits zero so fast is the margin call, which is automatic and unforgiving. Once the position's floating loss eats the margin, the broker closes the trade without asking, so there is no chance to wait the move out, and the 20-pip figure is not a warning you can negotiate, it is a hard line.
I have watched both versions play out, and the trader who used 1:500 as a margin discount rather than a position-size multiplier is the one still trading. The method behind both is volatility-based position sizing, and it works at 1:500 exactly as it works at 1:30.
How 1:500 compares to 1:30 and 1:1000
Positioning 1:500 against the ratios on either side of it is the clearest way to see what it is. At one end sits 1:30, the ESMA retail cap, where a fully maxed position survives a 3.3% adverse move and the margin is 3.3% of the position.
At the other end sits 1:1000, the offshore-only ratio, where a 0.1% move clears the account and no major regulator allows it for retail. 1:500 sits between them: a 0.2% move, available to regulated professionals and offshore retail, and roughly sixteen times the European retail ceiling.
The honest read is that 1:500 is closer to the 1:1000 end than the 1:30 end on the maths, even though it is closer to 1:30 on who offers it. The buffer is thin either way, which is why the professionals who can access it tend not to use it at full size.
One useful way to read the comparison is that every step up in leverage multiplies your position size and divides your survival distance by the same factor. Moving from 1:100 to 1:500 cuts the buffer from 100 pips to 20, which is a fivefold reduction in the room you have to be wrong, and the market charges for that room.
I place 1:500 in the high-risk bucket alongside 1:1000 when I am judging the maths, not in the regulated-and-therefore-safe bucket, because the regulator capped retail at 1:30 for exactly the behaviour 1:500 enables at full size.
Why 1:500 is only safe in one specific case
The honest answer is that the ratio is neither safe nor dangerous on its own, the behaviour is. 1:500 in the hands of a trader who sizes from risk is a margin discount, and 1:500 maxed out by a trader chasing size is a fast liquidation.
The reason regulators cap retail far below 1:500 is that most retail traders fall into the second group, not the first. The ESMA loss data, 74% to 89% of retail accounts losing money, concentrates at exactly the high-leverage, small-account combination that 1:500 at full size produces (ESMA).
So 1:500 is safe in the narrow sense that a disciplined trader can hold it without harm, and unsafe in the broad sense that the traders drawn to it are the ones the caps were built to protect. The deciding factor is whether the position is sized from risk or from the margin ceiling.
The one specific case where 1:500 is genuinely safe is the case most traders ignore, which is using almost none of it. A professional on a 1:500 account who trades at an effective 1:10 faces the same risk as a retail trader at 1:10, because the unused leverage simply sits there as margin headroom that never gets drawn on.
I would not call any high leverage safe for a beginner, and I would not call it dangerous for a professional who sizes from risk, because the word only means something once you know how the trader actually uses the ratio.
Common mistakes at 1:500
The errors that end 1:500 accounts are predictable, and naming them is most of the defence. The first is maxing out the ratio, opening the largest lot the margin allows and leaving a buffer measured in tens of pips.
The second is confusing available leverage with required leverage, assuming that because 1:500 is on offer, a sensible position must use it. The professionals who hold 1:500 accounts use a fraction of it, and the gap between available and used is where the safety lives.
The third is reaching 1:500 through an offshore broker to dodge the retail cap, which swaps a regulated ceiling for an unregulated one. The ratio looks the same, but the protections that come with regulation, segregated funds and complaint routes and leverage limits, are gone.
The fourth is sizing from the deposit instead of from the risk, which at 1:500 means a position so large that a single ordinary move ends the account. The honest use of 1:500 treats it as a way to free up margin on small, risk-sized positions, nothing more.
I made the second mistake for longer than I like to admit, because "available" reads like "meant to be used," and it does not. The traders who last are the ones who treat 1:500 as headroom, not as a target to fill.