Glossary · from the DESK dictionary
Leverage
The use of borrowed capital to increase the potential return of an investment, while proportionally amplifying the risk of loss.
In plain words
One of the most fundamental concepts in finance, capable of multiplying both gains and losses of an investment.
What it means for traders
A central concept in virtually every area of investing, from real estate to derivatives trading.
Common pitfalls
Can lead to losses significantly exceeding the originally invested capital during unfavorable market movements.
Related terms
Gearing Factor · Leverage Ratio
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.