Why Leverage Limits Differ by Country and Entity

The same brand, two different limits

A reader who compares the leverage advertised on a firm's site with what an account actually offers often finds a gap and concludes something has been misrepresented. Usually nothing has. A single brand commonly operates through several licensed companies in different countries, and the maximum leverage is a property of the company holding the account rather than of the brand above it.

Caps attach to the client category

Where leverage on retail forex and CFDs is capped, the cap belongs to the retail classification rather than to the instrument or the firm. The measures introduced across the EU in 2018, later carried into national rules and mirrored elsewhere, are the best-known example: tighter limits on the more volatile instruments, applied to retail clients. A client reclassified as professional falls outside the retail category, which is exactly why that route lifts the cap — and, in most regimes, several other protections along with it.

Residence decides the entity

This is why onboarding asks for a residential address so precisely. Residence determines which group company may lawfully take the client, and that company determines the rulebook. Two people signing up on the same day through the same website can end up with different maximum leverage, different negative balance protection and different access to a compensation scheme, purely because they live in different places.

Leverage is not the only thing that travels with the entity

The entity also determines where client money is held and under what segregation rules, which complaints and ombudsman route exists, whether an investor compensation scheme applies and up to what limit, and what the firm must disclose. Leverage is simply the most visible of these, because it is the one that appears in marketing. The others matter more at the moment something goes wrong.

Why an offshore entity can offer more

Higher leverage is generally available from entities licensed in regimes that do not impose retail caps. That is not by itself evidence of a bad firm, but it is a straightforward trade in which leverage is the advertised half. The unadvertised half is the rest of the list above: which scheme, which ombudsman, which segregation rules, and what recourse exists if the company fails. Higher leverage also raises the cost of being wrong, which is a separate matter from the regulatory one and is not improved by it.

Where the answer actually is

The figure on the website describes some entity, not necessarily yours. An account's real limit sits in the client agreement and in the contract specification for the instrument, and the entity named in that agreement is the one whose regulator's rules apply. Reading those two documents answers the question definitively — and they are the same two documents that answer most of the others.