Leverage
Trading with borrowed money, so gains and losses are bigger than your own cash would allow.
In plain English
With 2x leverage, a 10% move in the stock becomes a 20% move in your account, in either direction. Some products and contests allow much more than 2x.
Uncle Gary explains
Kevin borrows Uncle Gary's car for a road trip that will make them both rich. Leverage is wonderful right up to the first pothole, at which point it is still Gary's car.
Why it matters for your money
Leverage magnifies results both ways. Huge contest returns often involve it, and a rule tested without leverage can't reproduce them, for better and for worse.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.