What is stock leverage?

What is stock leverage? Stock leverage is to obtain funds by borrowing money to buy stocks, especially by using margin trading. In investment, leverage refers to borrowing a certain leverage ratio of funds to invest in the case of insufficient funds. Get high returns with less principal and expand risks at the same time. For example, an investor, with a principal of 500,000 yuan and double leverage, becomes an account of1100,000. Of course, increasing leverage also requires additional "borrowing" costs.

So how to apply for stock leverage?

1. Define the leverage operation: if selected, the original capital may be 654.38+10,000 yuan, and if it is 5 times leverage, it can provide 500,000 yuan;

2. When investing in stock products, 500,000 yuan is used to invest in stock products;

3. If you buy stock products when the stock market is good, adding leverage will amplify the income several times, but when the stock market falls, especially after entering the bear market, there will be the risk of liquidation and additional margin is needed.

4. The analysis of stock leverage principle is very simple. By understanding this principle, you can make your investment very professional.

When the stock market is good, it will amplify the income. When the stock market is not good, using stock leverage to speculate in stocks will only face the risk of liquidation, and will lose part of the principal. Users had better not use leverage when buying and selling stocks. Its risk is very high. Users can only use their own spare money when investing. This can not only reduce the loss amount, but also avoid the risk of liquidation.