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How is the leverage effect reflected in futures?
Futures is margin trading, that is, you only need to pay a certain percentage of money to do all the transactions.

For example, copper is 20,000 yuan per ton, and the first-hand price is 5 tons, so the total value of the first-hand order is 5 * 20,000 =100,000. If the margin ratio is 10%, then you only need 1 0,000 as the margin to buy or sell 1 hand copper. But the profit and loss are still calculated at the full price of the first-hand goods. If the copper price falls to 19000, then 5* 19000=95000. If you close your position at this time, you will win 5000 yuan, which is 50% compared with the principal 1000.

So the leverage of futures refers to the ratio of 1/ margin. The higher the margin ratio, the lower the leverage. Conversely, the lower the margin ratio, the higher the leverage.

The leverage ratio of regular futures products should be about 8~ 12 times. In short, the leverage effect is to amplify the multiple of winning or losing.