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.
If all the funds of 50,000 yuan are used for stock index futures trading, the risks borne by traders are brought by stocks or commodities worth about 500,000 yuan, which magnifies the risks by about ten times, and of course the corresponding profits are also magnified by ten times.
Matters needing attention
Whether the final result is profit or loss, leverage will increase at a fixed rate. Therefore, before using this tool, we must carefully analyze the income expectation and possible risks in investment projects.
In addition, it must be noted that when financial leverage is used, cash flow expenditure may increase, such as foreign exchange margin trading of Fuhui Global Jinhui. Otherwise, once the capital chain breaks, even if the final result may be huge profits, investors must go out early.