Table of contents
Quick summaryWhat you should know about CFD leverage limits
- Leverage is capped by asset class. Retail CFD leverage runs from 30:1 on major currency pairs down to 2:1 on cryptocurrency.
- The caps mirror ESMA's EU-wide measures. Norway, an EEA state rather than an EU member, enforces equivalent limits through its own national regulation.
- Margin cover determines leverage. The lower the required percentage, the higher the leverage you can access.
- Automatic close-out is mandatory. Brokers must close positions once account equity falls below half of the required margin cover.
- Negative balance protection is mandatory. You can lose your deposit, but a broker can't pursue you for more.
- Futures are outside this regulation. Futures margin is set by the exchange and broker instead, and isn't subject to a fixed regulatory cap.
In brief
Retail clients can get a maximum of 30:1 leverage on CFDs, and only on the largest currency pairs. The cap falls to 20:1 on gold and eight named equity indices, 10:1 on other commodities and indices, 5:1 on individual shares and 2:1 on cryptocurrency. These tiers mirror the EU-wide product intervention measures ESMA introduced for CFD trading, and equivalent limits are enforced by national regulators across the EU and EEA. In Norway, the limits follow a national regulation set by Finanstilsynet on 2 June 2018, in force for CFDs from 1 August 2018. Your broker must also close your positions automatically if the account falls below half of the required margin cover, and you can't lose more than what's on your CFD account.
How much leverage can retail clients get?
The rules express the limits as margin cover - the minimum share of the position's market value you must post as collateral. The leverage ratio is simply the inverse of that figure.
| Underlying | Margin cover | Max leverage |
|---|---|---|
| Currency pairs made up of two of: USD, EUR, JPY, GBP, CAD, CHF | 3.33% | 30:1 |
| FTSE 100, CAC 40, DAX 30, DJIA, S&P 500, NASDAQ Composite, Nikkei 225, ASX 200 · currency pairs with at least one currency outside the list above · gold | 5% | 20:1 |
| Commodities and indices not mentioned above | 10% | 10:1 |
| Individual shares and anything else not listed | 20% | 5:1 |
| Cryptocurrency | 50% | 2:1 |
Note that 20:1 only applies to the eight indices specifically named in the rules. If you trade a CFD on an index that isn't on the list, the cap is 10:1. That's a detail many overviews skip.
Why doesn't ESMA's decision apply directly?
ESMA adopted temporary EU-wide restrictions on CFDs and binary options on 22 May 2018. National regulators in EEA states outside the EU aren't automatically bound by an ESMA decision - Norway's Finanstilsynet is explicit about what that means locally: "These decisions are not binding in Norway."
Instead, Finanstilsynet used its own authority under section 42 of the MiFIR regulation and set a national regulation on 2 June 2018. The ban on binary options took effect on 2 July 2018, while the CFD restrictions applied from 1 August 2018. The content mirrors ESMA's decision, but it's the Norwegian regulation itself that forms the legal basis for brokers marketing in or from Norway.
The same pattern plays out across the EU and EEA: ESMA's 2018 measures were temporary by design, and individual national regulators subsequently made equivalent limits permanent under their own product-intervention powers. The exact effective dates, legal citations and enforcement details vary by country, so traders based outside Norway should confirm the current rules with their own national regulator.
What is margin cover, and how does it become leverage?
Margin cover is "any payment made for the purpose of entering into a CFD," excluding commissions, transaction fees and similar costs. In other words: the equity you must post to open the position.
A worked example: you want to open a CFD on EUR/USD with a market value of $100,000. That's a currency pair made up of two of the six named currencies, so the margin cover is 3.33 percent - $3,330. The ratio between the position and the collateral is 100,000 / 3,330, or roughly 30:1.
The same position size in an individual share requires 20 percent, or $20,000. In cryptocurrency it requires 50 percent, or $50,000.
What happens when the position moves against you?
The regulation requires the broker to close positions automatically. The trigger is precisely defined: when the sum of the funds in your account and the unrealized net profit on all open CFDs linked to the account falls below half of the total margin cover required for the open positions, the broker must close one or more of them.
The close-out must happen on the terms most favorable to you. The rule is a safeguard, not a guarantee against loss - in fast markets, the close-out can still happen at a worse price than the threshold implies.
Can I lose more than what's in my account?
No. Negative balance protection is mandatory. The regulation defines it as a limit on the client's total liability for all CFDs linked to the trading account, capped at the funds held in that account.
You can therefore lose your entire deposit, but the broker can't pursue you for more. The protection applies per account, not per position.
Why do different brokers show different loss percentages?
The risk warning you see at each CFD broker carries a provider-specific loss percentage. It isn't an industry-wide figure - it's the broker's own.
The rules require the percentage to be recalculated every three months, covering the preceding twelve months. An account counts as a losing account if the sum of realized and unrealized net results for the period is negative, and all charges, fees and commissions must be included in the calculation. Accounts with no open CFDs during the period are excluded.
If a broker has no data for the period, the warning must instead state "Between 74-89%." Seeing different figures across brokers is therefore normal and expected - they're measuring different client bases over different periods.
Do the same limits apply to futures?
No. The regulation covers CFDs and binary options. Futures are exchange-listed, standardized contracts and fall outside the definition of a financial contract for difference used in the rules.
Futures margin requirements are instead set by the exchange and by your broker, and vary by contract and volatility. They're often far lower as a share of contract value than CFD margin cover, but they aren't regulated under a fixed cap in the same way. Read more in our guides on futures trading and Micro E-mini futures.
Which brokers offer CFD trading to European traders?
We've reviewed four CFD brokers relevant to European traders. All must follow the limits above, and all must display an up-to-date, provider-specific risk warning.
| Broker | Best for | Our review |
|---|---|---|
| Skilling | Norwegian traders who want BankID login and Norwegian-language customer service | Read the review |
| eToro | CopyTrader and social trading | Read the review |
| IG | Broad market selection and advanced platforms | Read the review |
| CMC Markets | Experienced traders who want platform depth | Read the review |
If you'd rather trade futures than CFDs, see our overview of futures brokers we've tested.
Sources
- Regulation on the prohibition of marketing, distribution and sale of binary options to non-professional clients, and restrictions on the marketing, distribution and sale of contracts for difference (CFDs) to non-professional clients (PDF, Finanstilsynet, set 2 June 2018)
- Finanstilsynet's announcement of the regulation
- Finanstilsynet's warning on CFD trading
- How we test and review brokers
Conclusion
Europe's CFD leverage caps are stricter than many traders expect, and they run through national regulation rather than a directly binding ESMA decision - especially for EEA states like Norway that sit outside the EU. 30:1 is reserved for the largest currency pairs. Everything else carries a lower cap, and for cryptocurrency it's as low as 2:1.
The limits exist because leverage amplifies losses just as much as gains. Regulators across Europe generally caution non-professional investors against CFD trading altogether. Make sure you understand how the product works before you use leverage.
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Frequently asked questions about CFD leverage limits in Europe
Short answers to the most common questions about leverage, margin cover, automatic close-out and the risk warning.
Under Norway's national rules, the maximum is 30:1, and only on currency pairs made up of two of: the US dollar, euro, Japanese yen, British pound, Canadian dollar and Swiss franc. For gold and eight named equity indices the cap is 20:1, for other commodities and indices 10:1, for individual shares 5:1, and for cryptocurrency 2:1. These tiers mirror ESMA's EU-wide product intervention measures, and equivalent limits apply under national rules across the EU and EEA.
Not directly. Finanstilsynet states that ESMA's decisions are not binding in Norway, since Norway is an EEA member rather than an EU member. Instead, a Norwegian regulation set by Finanstilsynet on 2 June 2018, under the authority of the MiFIR regulation section 42, applies. The content mirrors ESMA, but the legal basis is Norwegian.
Margin cover is any payment made for the purpose of entering into a CFD, excluding commissions, transaction fees and similar costs. It's the equity you must post to open the position, and it determines how much leverage you get.
No. Negative balance protection is mandatory. A client's total liability for all CFDs linked to the trading account is limited to the funds held in that account. You can lose your entire deposit, but not more.
When the sum of the funds in the account and the unrealized net profit on all open CFDs falls below half of the total margin cover required for the open positions. The close-out must happen on the terms most favorable to the client.
Because the percentage is provider-specific. Each broker recalculates it every three months for the preceding twelve months, based on its own client accounts. If a broker has no data for the period, the warning must state between 74 and 89 percent.
No. The regulation covers CFDs and binary options. Futures are exchange-listed, standardized contracts and fall outside it. Margin requirements for futures are set by the exchange and the broker, and vary by contract and volatility.