What leverage can I use on index CFDs in Australia?
Verdict
- Retail clients in Australia can use up to 1:20 on major index CFDs (5% margin), 1:10 on minor indices and 1:5 on currency indices; these are the limits at Pepperstone, our recommended broker, under ASIC rules.
- Capital.com's Australian entity lists the same 1:20 cap on major indices.
- Pepperstone's professional clients can reach 1:400 on major indices and 1:100 on minor ones, but give up full negative balance protection.
- At 1:20, a 5% move against you wipes out the entire margin on a position.
Since ASIC's product intervention on CFDs, leverage for retail clients has been capped by asset class, and indices sit in the middle of the table. Here are the limits, what they mean in dollars, and when, if ever, it makes sense to ask for more.
Pepperstone's index leverage for Australian clients
Pepperstone Group Limited (AFSL 414530) publishes its full leverage table on its Australian costs page. For retail clients: 1:20 on major indices, 1:10 on minor indices and 1:5 on currency-index CFDs. For professional clients: 1:400 on major indices, and 1:100 on both minor and currency indices. Retail accounts get negative balance protection; pros get a one-time protection of up to USD 100,000 instead. Your platform shows the margin rate for each symbol, which confirms which tier an index falls into.
Affiliate link — we may earn a commission at no extra cost to you.
Retail and pro limits side by side
Pepperstone's accounts page also summarises leverage as 'Retail 30:1 · Pro 500:1'; those headline figures match its major FX limits, not its index limits.
| Index type | Retail | Margin | Pro |
|---|---|---|---|
| Major indices | 1:20 | 5% | 1:400 |
| Minor indices | 1:10 | 10% | 1:100 |
| Currency indices | 1:5 | 20% | 1:100 |
What the caps mean in dollars
Take a position with A$40,000 of index exposure. At the retail 1:20 cap you need A$2,000 of margin; at a pro 1:400 you would need A$100. The index only has to fall 5% to erase the retail margin, and a quarter of one percent to erase the pro margin. Leverage does not change how much a given position wins or loses; it changes how little cash you need to open it, and therefore how easily you can open more than you can afford. Most experienced index traders use far less than the maximum.
Should you apply for pro status?
- You need to qualify: either a sophisticated-investor test plus a quiz, or net assets of AUD 2.5 million or income of AUD 250,000 a year for two years, certified by an accountant.
- You lose full negative balance protection; beyond USD 100,000 you could owe the broker money after a gap.
- You gain capital efficiency, which matters mostly to traders running hedged or multi-market books.
- For a typical retail index trader, 1:20 is already more than enough.
Sources
Is the ASX 200 a major index for leverage purposes?
Check the margin rate shown for AUS200 in your platform: 5% means the 1:20 major-index cap applies.
Can I choose lower leverage than the maximum?
Yes. Leverage is a ceiling; you control your effective leverage by the size of the positions you open relative to your balance.
Is index leverage higher at offshore brokers?
Offshore entities often allow more, but you would give up ASIC oversight. We recommend staying with an Australian-licensed entity.
Higher leverage means larger and faster losses. CFDs are complex and risky, and pro clients lose some retail protections. General information only, not investment advice.