Using leverage to invest can amplify gains, but it may also exponentially amplify losses, which is a high-risk strategy. The following are some common ways of leveraged investment, but please be sure to carefully evaluate your risk tolerance and fully understand the relevant rules： --- ### **1. Margin trading (stocks/cryptocurrencies)** -**Mechanism**: Borrow funds through brokers or exchanges, use existing funds as collateral, and expand purchasing power (for example, 1:2 leverage, you can use 10,000 yuan principal to buy 20,000 yuan of assets). -**Risk**: A price drop may trigger forced liquidation of positions, resulting in a significant loss of principal. -**Applicable markets**: stocks (margin financing), cryptocurrencies (such as Bitcoin contracts). --- ### **2. Futures contract** -**Mechanism**: Through the payment of margin (usually 5%-20% of the contract value) to trade the underlying assets (commodities, stock indexes, foreign exchange, etc.), the leverage ratio can reach 5-20 times. -**Risk**: High volatility may cause insufficient margin to be liquidated, and there is a delivery risk. -**Case **: Crude oil futures, S&P 500 Index futures. --- ### **3. Foreign exchange leveraged trading** -**Mechanism**: Foreign exchange brokers provide high leverage (such as 1:50 to 1:500) to trade large additional contracts with a small amount of funds. -**Risks**: Exchange rate fluctuations are severe, and excessive leverage can easily lead to explosive positions; international political and economic events need to be paid attention to. -**Platform**: MetaTrader, Forex. com and so on. --- ### **4. Option trading** -**Mechanism**: By buying call/put options (the premium is the cost), or selling options (the premium is charged but unlimited risk is assumed). -**Leverage effect**: The premium is much lower than the price of the underlying asset, and the potential yield is high. -**Risk**: The seller may face huge losses; the attenuation of time value affects the income. --- ### **5. Leveraged ETFS/ETN** -**Mechanism**: Exchange-traded funds (ETFs) or bills (ETNs) use derivatives to achieve 2-3 times the daily rise and fall of the underlying index. -**Risk**: Long-term holdings may deviate from expected returns due to volatility loss (Beta attenuation). -**Case **: S&P 500 Triple Long ETFS (UPRO), Panic Index Inverse ETFS (SVXY). --- ### **6. Real estate leverage** -**Mechanism**: Buying a house through a low down payment loan (for example, a 20% down payment, 5 times leverage), relying on rising house prices and rental income. -**Risk**: Rising interest rates, falling rents or falling house prices may lead to negative equity and poor liquidity. --- ### **7. Private leveraged funds** -**Mechanism**: Invest in hedge funds or private equity funds, using leverage strategies (such as M&A leveraged LBO, high-yield debt arbitrage). -**Risk**: High threshold (usually one million starting investment), low liquidity, failure of the strategy may lead to huge losses. --- ### **8. Contract for Difference (CFD)** -**Mechanism**: Do not actually hold assets, bet on price rises and falls through contracts, and leverage can reach more than 1:30. -**Risk**: High leverage + spread fees may quickly swallow the principal, and some countries are strictly regulated (such as the United States prohibits it). --- ###**Risk warning** - **Forced liquidation of positions**: In leveraged trading, forced liquidation will be triggered when the loss exceeds the margin, and the principal may return to zero. -**Volatility amplification**: Short-term market fluctuations can lead to huge losses, and strict stop losses are required. -**Cost pressure**: Leveraged funds usually have interest or financing costs, and long-term holding costs are high. -**Psychological impact**: Leverage may exacerbate irrational decision-making and requires a high degree of discipline. --- **Recommendation**: First-time contacts are recommended to practice with a demo account first, fully learn about derivatives, and try only with funds that can withstand losses. Leveraged tools are more suitable for experienced investors or institutions.