The leverage of domestic futures varies with different varieties. Generally, the lever of corn, rice and wheat is about 13 times at night, with little fluctuation. Palm oil and soybean oil with moderate fluctuations have leverage of 10 times. Copper, zinc and rubber are generally 8 times leverage, which fluctuates greatly.
Leverage, adding borrowed money to existing funds for investment; Leverage ratio, the ratio of assets to bank capital. Rational use of leverage principle is helpful for enterprises and individuals to accelerate their development and improve their efficiency, but there is also the risk that they will not be able to repay when due. Leverage is debt, and leverage ratio is debt ratio.
Leverage ratio
The attraction of certified stocks is that with only a small amount of money, you have the opportunity to win similar or even higher returns than investing in conventional stocks. However, investors often confuse the leverage ratio of warrants with the actual leverage ratio when choosing warrants. What's the difference between them? What should I look at when investing?
If you want to know whether these two terms are confused, you can ask a question: suppose there are two warrants for the same share, the leverage of warrant A is 6.42 times, while the leverage of warrant B is 16.22 times. When the stock price goes up, which one goes up more? Many people may choose answer B. In fact, it depends on the potential increase of warrants, and the actual leverage ratio of warrants should be compared rather than the leverage ratio. Due to the lack of enough information, we can't get the answer from this question.
Leverage ratio = stock spot price ÷ (warrant price x share conversion ratio)
Leverage reflects the cost ratio of investment stocks to investment warrants. Assuming that the leverage ratio is 10 times, it can only show that the cost of investment warrants is one tenth of that of investment stocks, but it cannot show that when stocks rise 1%, the warrant price will rise 10%.
Here are two subscription cards with the same maturity date and extension range, but different exercise prices. As can be seen from the table, in terms of subscription certificates, the exercise price is higher than the positive stock price, the stock certificate price is generally low, and the leverage ratio is generally high. However, if investors use leverage to predict the potential increase of warrants, the actual performance may be disappointing. When the stock rises 1%, warrant A with leverage ratio of 6.4 times actually rises by 4.2% (instead of 6.4%), and warrant B with leverage ratio of 16.2 times actually rises by 6%.