Leverage in futures is the original mechanism of futures trading, that is, the margin system. The "leverage effect" enlarges the tradable volume of investors and doubles the risks that investors bear. Suppose a trader uses a sum of 50,000 yuan for stock or spot trading, and the risk of the trader is only brought by stocks or commodities worth 50,000 yuan.

The reason why futures need leveraged trading is that leveraged trading can enlarge the funds in the market, thus increasing the trading volume. The reason why the futures market dares to provide a larger financing ratio is because the daily average volatility of the futures market is very small, only about 1%, and the futures market can use less margin from investors to resist market fluctuations without its own risk.

The management of funds directly determines our ability to take risks. The mid-term judgment of price is easier to grasp than the short-term fluctuation law. Then, if I use too much leverage, I will not only be inaccurate in judging the medium-term trend, but also be eliminated in short-term fluctuations. If the light warehouse grasps its relatively certain medium-term opportunities, it can ignore the short-term fluctuations too much and use time to verify the accuracy of its judgment.