The leverage effect in futures is the original mechanism of futures trading, that is, the margin system. The "leverage effect" not only enlarges the tradable amount of investors, but also increases the risks taken by investors many times. Suppose a trader uses a sum of 5 thousand yuan for stock or spot trading, and the trader's risk is only brought by stocks or goods worth 5 thousand yuan.

If all the funds of 5, yuan are used for stock index futures trading, the risks borne by traders are brought by stocks or goods worth about 5, yuan, which magnifies the risks by about ten times, and of course the corresponding profits are also magnified by ten times. It should be said that this is not only the fundamental source of risk, but also the charm of stock index futures trading.

Extended information:

Leverage risk of futures trading

Futures trading adopts margin trading, which amplifies the benefits and risks of investment. Therefore, ordinary investors who are used to stock trading should pay more attention to the unique risks of this margin trading system when investing in stock index futures. For example, suppose that the current Shanghai and Shenzhen 3 futures index is 3 points, the contract multiplier is 3, and the contract value is 3× 3 = 9, yuan.

if the margin charge ratio is 1%, regardless of fees and other expenses, in theory, a transaction with a primary contract value of 9, yuan can be conducted with an investment of 9, yuan (only in theory, it is not desirable in actual transactions). If the futures price rises by 1%, the bulls can make a profit of 9, yuan with a yield of 1%. But for bears, the yield is-1%, that is, the investors' margin is completely lost, which is the leverage risk of margin trading.