Leveraged trading is to invest several times the original amount with very little money. In order to expect to get a rate of return that fluctuates several times relative to the investment target, or lose money. Because the increase or decrease of margin (small funds) does not move according to the fluctuation ratio of the underlying assets, it is very risky.
Extended data:
Leveraged trading is also called virtual trading and deposit trading. That is, investors use their own funds as a guarantee to enlarge the financing provided by banks or brokers for foreign exchange transactions, that is, to enlarge the trading funds of investors. The financing ratio is generally determined by banks or brokers. The greater the financing ratio, the less money customers need to pay.
High leverage facilitates flexible positions, but it is a double-edged sword. For high-level investors, under the premise of strictly controlling risks, profits or floating profits can continue to use high leverage to add positions, which makes it possible to realize profiteering.
Baidu Encyclopedia-Leveraged Trading