How are Margin and Leverage connected

In forex trading, you use margin to create leverage. In other words, leverage is the process by which you reinvest the debt (margin) to make bigger profits. Leverage options are expressed either in terms of leverage ratio (for example 200:1) or in terms of margin percentage (for example 0.5%). Leverage and margin are connected according to this simple relationship: Margin percentage = 100 / leverageLeverage = 100 / margin percentageFor example, Finotec offers a 200:1 leverage. What is the corresponding margin percentage? According to the ratio above, the margin percentage is: 100/200 = 0.5%