In the stock market, leverage can be increased through capital allocation and financing. However, because there is no formal fund-raising platform in China, investors can only borrow and buy securities from brokers. Financing means borrowing money from securities companies to buy stocks, and short selling means borrowing securities from securities companies, thus increasing leverage.

Because margin trading is leveraged, not all investors can open it. In order to protect the interests of investors, the regulatory authorities stipulate that the following requirements should be met when opening a margin trading account: half a year's trading experience and a capital requirement of 500,000 daily assets in the 20 trading days before opening an account.

Financing: Simply put, borrowing money to buy stocks. However, after the securities company needs investors to transfer the corresponding collateral into the credit account of the securities company, the listed company will lend the corresponding funds according to the discount rate of the collateral. Generally, the cash conversion rate is 100%, while the stock conversion rate is between 70% and 90%.

Securities lending: borrowing securities from securities firms and selling them, and then buying them at a low price after the stock price falls and returning them to securities companies.