Leverage increases buying and selling power by providing traders with virtual capital. Leverage is the capital borrowed by traders from their broker to increase the potential return on investment. If a broker offers a leverage of 1:100 for example, this means that it ” loans” the trader $99 for every dollar the trader deposit so the trader buying power is increased 100 times. So 1:500 means 500 times more buying and selling power You should keep in mind that while leverage can significantly increase ones profit it also increases risk so you should be cautious when trading on leverage.