Leverage is a fairly common investment strategy, we can also simply understand it as a multiplier, whether the final result is a gain or a loss, will increase in a fixed proportion, so before deciding whether to use leverage, you need to understand the return expectation of the investment product and the range of risk in advance. There are many products on the market that are directly linked to leverage, and the leverage will be more special, so today I will introduce to investors what leverage means.
1. The leverage model used for ** investment
*What does leverage mean?Financial leverage is actually a magnification factor, the use of relatively small funds to obtain several times of the rate of return, often used in the spot and ** market, then the special feature of **leverage is that it is through financing, lending or margin trading and other ways to buy**, so as to allow investors to trade a larger amount of ** in the case of a small amount of their own funds. For example, if the increase of a ** is 10%, then investors who use 2 times leverage can get a 20% return, but this method will undoubtedly increase the risk at the same time, so it is a reason to use the 0 slippage limit platform to do a good job of risk control protection with investing in spot**.
2. **There is also a form of leverage with its own
In addition to margin trading, there is also a stock index, a form of trading with leverage, although it is a type of product, but because it is a standardized contract with the stock price index as the subject matter, its trend is directly linked to the index, so what leverage means should also be understood in conjunction with this. The leverage of the stock index is realized through the margin trading system, and the basic principle is actually similar to investing in other products, while the advantage of the stock index is that it can be traded in both directions, and the implementation is the T+0 system, which means that it supports the same day of trading, and the more important point for novices is that the stock index has no difficulty in selecting stocks.
*What does leverage mean?To put it simply, it is to buy ** through financing and other means, or choose a stock index with leverage**, both of which use the principle of leverage to directly amplify the risk and return, but they all have a common disadvantage, that is, the investment threshold is too high, so if you have limited funds and want to try leveraged trading, it is still recommended to choose traditional leveraged products such as spot**, and you can enter the market with only $30 using DTW Global's mini account.