Multipliers - The power of X

What are multipliers and how to trade with them

2020 has been a globally eventful year so far. With the world facing the Covid-19 pandemic and political and economic restlessness, and with the U.S. elections coming up, the forex market has been very active. Trading in and taking advantage of a highly active market is exciting and can be extremely fruitful, but it has its risks, and even the most seasoned trader is afraid of getting wiped out with a bad trade.

Fortunately, Deriv.com has recently launched an ideal trade type for anyone who wants to take advantage of high market volatility. It's called multipliers, and it is available on Deriv's DTrader. Multipliers help the traders by accelerating their gains and giving them control over risks so that they can limit losses if the market goes south.

What are multipliers?

Deriv.com has introduced a new trading type, multipliers, which combines features of options and CFD margin trading - giving you the upside of leveraged trading with the limited downside of options trading. It gives you full control of your trade, and your risk is only limited to the stake amount you set, but the potential profit is unlimited.

How does multipliers work?

Working with multipliers is very simple. You can choose between two options, Up or Down based on your predictions of the market.

Select Up: Earn a profit by closing your position when the market price is higher than your entry spot.

Select Down: Earn a profit by closing your position when the market price is lower than your entry spot.

Deriv.com allows you to trade without the fear of losing more than your stake. If the asset price direction goes against what you have predicted, your trade will be stopped automatically if your loss reaches the stop-out level.

The stop-out level on the chart indicates the price at which your potential loss equals your entire stake. When the market price reaches this point, it will automatically close your position, ensuring your loss never exceeds your stake.

Multipliers allows you to increase your profit margin by applying a multiplier value on your initial stake amount. Say the price change on the market goes according to your contract, your profit will be increased by the multiplier value that you have selected.

Your profit will be the percentage change in market price times your stake and the multiplier of your choice. We will charge a small commission when you open a position with multipliers.

For example, say you're trading with a stake of $100 and x500 multiplier. Your stake is now leveraged 500-fold. If the market price changes in your favour by 2%, you're looking at a profit of $1,000. Without the multiplier, you'd only gain $2.

Now you must be thinking "What if the market moves opposite to my prediction? Will my loss also increase?"

The answer is no, and here's why: Because of the multiplier's default automatic stop-out feature, you can never lose more than your stake. This way with $100 and x500 you can earn $1000 and your loss is only limited to $100.

More control with multipliers

Multipliers comes with several risk management tools.

This article was submitted by Deriv.

Stake

Here you select an amount for your stake in the marketplace. To ensure your loss does not exceed your stake, your contract will be closed automatically whenever the loss equals the stake amount you set here.

Multiplier

This is the multiplier value you choose to multiply your profit with. Your profit is the percentage change in the market price times your stake. The commission will vary according to the multiplier value you select.

Take profit

To secure your gains, you can manually exit when the market is in your favour. Or you can set a take profit level to automatically close your trade when your gains match or exceed this amount.

You can set a take profit value before or after you've purchased the contract, and it can be re-adjusted at any time while a trade is active.

Selecting this option will allow you to automatically close your contract once your profit is more than or equal to this amount.

Stop loss

Stop loss lets you set precisely how much you are willing to risk. This allows you to cut your losses before your entire stake amount is gone. If your loss matches or exceeds this amount, your trade will automatically close.

You can set a stop loss before or after you've purchased the contract. It can be re-adjusted at any time, even when a trade is active.

Deal cancellation

With deal cancellation, you can cancel a trade up to 1 hour after the purchase.If the stop-out amount is reached before the deal cancellation expires, your position will be cancelled automatically and your stake amount will be returned without profit or loss. Only a small fee will be charged.

Keep in mind that Deal cancellation cannot be set if Take profit and Stop loss are selected.

Now let's start trading with multipliers.

Getting started with multipliers

You can start trading with multipliers by following these simple steps:

Step 1: Log in to your Deriv.com account and enter DTrader.

Step 2: Select Synthetic indices -> Volatility type or select Forex -> Major pairs.

Trade with multipliers on forex trading during the FX trading hours on weekdays or trade every day with multipliers on synthetic indices.

Step 3: Now, under Trade types, choose Multipliers

Purchasing your first multipliers trade

Step 1: Define your position

Choose your preferred asset. Enter your stake amount. Select the multiplier value you prefer, anything from x10 to x500 (profit/loss will be multiplied by this).

Step 2: Purchase your trade

Click Up or Down to purchase a contract according to how you predict the market will move.

To manually close a contract simply click on Close under Recent positions

Why should I trade with multipliers?

Limit risk

Multipliers gives you great flexibility in terms of risk management during high market volatility, e.g. significant economic events. If a big price movement happens against your position:

Your potential loss is always limited by the stake size. In margin trading, if a client doesn't apply stop loss then he can lose his whole deposit. Even with stop loss in place the loss can be much more than expected because of price gaps. But with multipliers, you can never lose more than your stake.
With deal cancellation, if the asset price reaches the stop-out level after a sudden jump the deal will be cancelled automatically with 100% refund of the stake.

Play big

Choose from x50 to x500. The higher the multiplier, the higher your potential gains.

Be in control