Leveraged trading is a double-edged sword that can both amplify gains and accelerate losses. It needs to be used cautiously under the premise of a deep understanding of its mechanisms and risks. The following are some key points and suggestions for your systematic reference： ###1. The underlying logic of leveraged trading 1. **Essential cognition**: Leverage is the act of amplifying the efficiency of the use of funds by borrowing funds (such as brokerage financing, margin trading) or financial instruments (such as options, futures). 10 times leverage means that 1% market volatility will bring 10% account volatility. 2. **Cost structure**： -Financing interest (common at an annualized rate of 5-8%) -Forced liquidation risk (maintain margin ratio) -Implied cost (loss of moving positions on schedule, attenuation of option time) ###2. Compulsory courses before actual combat 1. **Risk control pyramid**： -Capital layer: A single transaction does not exceed the total capital 2% -Leverage layer: ≤3 times recommended for novices, ≤5 times for veterans (stocks) -Stop loss layer: price stop loss + time stop loss (if the position is not reached within 3 days, it will leave the market) 2. **Stress test tool**： -Use TradingView to backtest historical extreme market conditions (such as the U.S. stock market meltdown in March 2020) -The demo account must undergo a complete bull and bear cycle test ###3. Advanced transaction framework 1. **Hedging leverage strategy**： ```python # Stock long and short hedging example long_position = buy high-quality stocks + hedge short orders on stock index futures # Adjust the hedging ratio through futures leverage to achieve net position exposure control ``` 2. **Derivative portfolio strategy**： -Option strategy: Buy deep real-value call options (Delta>0.8) instead of regular stocks -Futures spread: Leverage is used to amplify the spread income during inter-period arbitrage 3. **Dynamic management of leverage ratio**： -Volatility weighting method: Leverage ratio =1/Market volatility -Kelly formula: f= (bp-q)/b (win rate p and odds b need to be strictly calculated) ###4. Key risk control indicators | Indicators | Alert Thresholds | Response Measures | |---------------|----------|---------------------------| | Account drawdown | > 12% / Immediately reduce leverage to 50% | | Margin utilization rate | > 65% | Margin call or position reduction | | Volatility has soared | VIX> 30 / Switch to inverse ETFs for hedging | ###5. Eight pitfalls that must be avoided 1. Leverage Stacking leverage (such as financing to buy graded funds) 2. Illiquid assets plus leverage (small market value coins/shares) 3. Maintain high leverage before the release of important economic data 4. Use short-term liabilities for long-term leveraged investment 5. Ignoring the compound loss of leverage (the annualized financing interest of 0.02% per day can reach 7.3%) 6. Emotional replenishment (don't try to dilute costs by increasing leverage) 7. Cross-market leverage contagion (such as pledge real estate to invest in the stock market) 8. Ignore the tax impact (there may be special provisions for leverage interest deduction) ###6. Reference for actual combat cases Lessons from the 2015 A-share stock market disaster： -The balance of Liangrong reached a peak of 2.27 trillion, accounting for about 4.7% of the circulating market value.% -Many stock financing liquidation lines are concentrated in the area where the stock price has fallen by 30%. - Liquidity depletion when it leads to a downward spiral It is recommended to always reserve 30% of the reserve fund to deal with extreme market conditions, which is more important than pursuing excess returns. Remember: the first consideration of a true trader is how to survive, and the second is how to make a profit. It is recommended to use a demo account to complete at least 100 leveraged transactions before investing in real funds.