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leverage
What does leverage mean?
The use of borrowed funds, margin, or options to amplify exposure — multiplying both potential profits and the risk of a blown account.
"He used way too much leverage and got margin called."
Origin
Standard finance term; a recurring cause of the blowups celebrated on WSB.
Frequently asked questions
What is leverage in trading?
Leverage is the use of borrowed funds, margin, or options to amplify your market exposure — multiplying both potential profits and the risk of a blown account.
Why is leverage risky?
Because it magnifies losses as well as gains. Too much leverage can trigger a margin call and wipe out an account when a trade moves against you.
How is leverage used on WSB?
It's a recurring cause of the spectacular blowups the community celebrates, e.g. 'He used way too much leverage and got margin called.'
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