Leveraged investment can amplify returns, but it is also accompanied by higher risks, which may lead to the loss of all principal and even liabilities. The following are some common ways to use leverage to make high-risk investments, but please be sure to carefully assess your risk tolerance and consult a professional financial adviser if necessary. --- ### **1. Margin trading (stocks, foreign exchange, cryptocurrency)** -**Stock margin**: Buying stocks through brokerage financing, usually with a low leverage ratio (such as 1:2), but a decline in the stock price may trigger forced liquidation. -**Foreign exchange margin (Forex)**: Leverage can reach 1:50 or even higher (some platforms reach 1:500), exchange rate fluctuations are severe, and high risks. -**Cryptocurrency leveraged trading**: The exchange provides leverage (such as 1:5 to 1:100), the price fluctuates greatly, and it is prone to explosive positions. ### **2. Derivative instruments** -**Futures contracts**: Standardized leveraged contracts (such as commodity, stock index, and Treasury bond futures) require margin payment, and the leverage ratio is usually above 1:10, which may face the risk of liquidation. -**Option trading**: To buy an option (limited risk) or to sell an option (potentially unlimited loss), you need to pay a premium or a margin. -**Contract for difference (CFD)**: Tracks the price of the underlying asset, highly leveraged (common at 1:30), but implies no renewal fees and swap interest. ### **3. Leveraged ETFS/ETN** -**Leveraged ETFs**: Achieve 2 times or 3 times the daily return of the underlying index through financial derivatives (such as Nasdaq 3 times long ETFs), long-term holdings may lose money due to volatility. -**Inverse ETFs**: Short-selling leveraged instruments, with higher risks. ### **4. Leveraged real estate investment** -**Mortgage purchase**: A low down payment (such as 20%) amplifies real estate income, but it may be bankrupt when the market falls. -**REITs plus leverage**: Some real estate trust funds use debt financing to amplify returns and risks. ### **5. Private equity leverage strategy** -**Hedge funds**: Some funds use leverage (such as M&A arbitrage, macro hedging), have high thresholds (qualified investors), and poor liquidity. -**Structured products**: Such as leveraged snowball products, the principal may be lost. ### **6. Other high-risk leverage methods** - **P2P lending and leverage**: Through borrowing and then lending, credit risk is superimposed on liquidity risk. -**Junk bonds (high-yield bonds)**: By borrowing money to invest in low-rated bonds, the risk of default is high. --- ###**Risk warning** 1. **Risk of bursting positions**: Leverage will amplify losses, and reverse market fluctuations may cause the principal to return to zero or even default on funds. 2. **Liquidity risk**: It is difficult to close positions in extreme market conditions. 3. **Debt risk**: Some leveraged instruments (such as OTC derivatives) may generate liabilities that exceed the principal amount. 4. **Psychological pressure**: High leverage can easily lead to irrational decision-making. ###**Suggestion** -Use only idle funds to avoid borrowing and investment. -Strictly set a stop loss and control the position (such as a single investment does not exceed 5% of the principal). - Fully learn the relevant tool mechanisms, simulate the disk test and then operate the real disk. Leverage is a "double-edged sword”, and cases of bankruptcies due to leverage (such as LTCM, a long-term capital management company) abound in history. Be sure to do what you can.