The word leverage is often used in the financial world. In fact, as the name suggests, we can understand that the so-called leverage is to move larger objects. We don’t have that much power ourselves, so we have to use some tools to leverage ourselves. The thing that can’t be leveraged at all is leverage. So what role does leverage play in the financial circle?

Let’s assume that we have 10,000 yuan in hand and I want to buy stocks, but the profit from buying stocks with 10,000 yuan is too small. What should I do? Because no one is willing to lend me money, investing in stocks is very risky. At this time, an institution appears, which is a securities firm or other financial institution, and it is willing to lend you money. You have 10,000 in hand, and if I lend you 40,000, it will be 5 times the leverage. If I lend you 90,000, it will be 10 times the leverage, because the money in your hand now is already 10 times the 10,000.

Got it! Brokerages or other financial institutions give you an opportunity to leverage bigger things. If you invest 10,000 yuan in the stock market, you can get a profit of 100,000 yuan. This is simply a good thing! Don't worry, there are so many pies in the world that you will eat. Generally, what you get are traps instead of pies. If you take the broker's money, the broker will not let you take the money in vain.

If you take this 100,000 yuan to invest in the stock market or the futures market, and you earn a large amount of cash, you have to give some of the money to other securities companies, even if they lend you 90,000 yuan, you This is why we also want to give people interest. But as for how much you will be given, it depends on how much leverage you take and the contract you sign with the brokerage. It is mainly a matter of percentage.

What should we do if we make money? What should I do if I lose money? Don't worry! Brokers are not fools. From the moment you take the money away, your account has been monitored by the broker's system. Let us remember that 10,000 of the 100,000 yuan is our own, which means that 10% of the 100,000 yuan is ours, right? When you invest in the stock market or futures market, your loss reaches 10%.

The brokerage will definitely notify you as soon as possible to increase the position, which means that you have to make up for the 10% loss, and you have to come up with another 10,000 yuan, otherwise the brokerage can force the liquidation of the position. . That is to sell your stocks or futures directly, because the brokerage will not let its own money be lost. Even if the brokerage is a step slow in the operation, 90% of it will suffer a certain loss, so you will have to bear this part of the loss. Compensatory.

Yes, brokers are so unreasonable, but you were very happy when you made money, and now you have to admit it when you lose money. This is the true face of leverage, and this is an important reason why many people lose all their money or even their families after using leverage when the stock market prospects are not good, because you owe the brokerage money.