In finance, leverage refers to the use of borrowed funds to increase one’s trading position beyond what would be available from their cash balance alone. Leverage can amplify both profits and losses and involves borrowing capital to increase the potential return of an investment. In trading, leverage is typically used to purchase assets like securities, property, or commodities.
« Back to Glossary Index
About the author
Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
Her insights simplify complex financial topics into actionable strategies for beginners and seasoned traders alike.