Leverage effect refers to the application of physical principles in the financial market, which means that investors can simultaneously amplify risks and benefits with less funds through the margin system.

For example, the Shanghai futures market stipulates that the margin ratio of copper is 8%, which means that investors can trade copper of 100 yuan with the principal of 8 yuan. If the rise and fall of copper is in line with investors' direction, then investors can take advantage of this 8 yuan to gain profits, which means that investors can participate in trading with less funds than the spot market with the same proportion of funds. Of course, if investors are in the opposite direction, then investors are more likely to face the risk of loss than the spot market.

Currency is overvalued, which means the exchange rate of currency is overvalued.