During the bull market, many people will leverage stocks. Usually, the leverage methods known to investors are margin financing and fund allocation, but in fact, these are only two leverage methods of stocks, and the other two are umbrella trust funds and graded funds. Here, I will explain the advantages and disadvantages of these four methods, and hope that everyone can rationally choose leveraged stocks.

First, margin financing and securities lending.

Margin trading is a business carried out by brokers. By providing collateral to brokers, we can borrow money to buy stocks, or borrow money to sell stocks and then buy them back at a low price. Among them, financing is to enlarge the amount of funds, that is, to increase leverage, while securities lending is to let us short a stock.

Of course, there is a threshold requirement for margin financing and securities lending. Your account assets must exceed 500,000 before you can apply for financing business. At the same time, the warning line for brokers is 150%. Once the warning line is about to be touched, the broker will inform you of the additional margin. If you touch the closing line of 130%, when you don't add the margin within the specified time, the brokers will forcibly close their positions to avoid losing their funds.

The advantage of financing is that it can maximize our profits in a bull market, but the stock market changes rapidly and the risks increase exponentially at the same time. I suggest you try not to raise money to buy stocks, even if you want to use them, don't overdo it, and learn to stop.

Second, capital allocation.

Capital allocation is a kind of private lending behavior and also belongs to peer-to-peer lending. It is an internet financial product. The advantage of capital allocation is that there is no capital threshold requirement, as much as there is, and the leverage can be selected between 1- 10 times. However, the current fund-raising platforms are mixed, and many of them are simply deceptive. So you must know the actual situation of the company and choose a more reliable big company to use them again.

The interest on capital allocation is relatively high, with daily capital allocation and monthly capital allocation. Of course, all leverage increases will have a warning line and a liquidation line. For example, if you have10,000,000 funds, you can increase the leverage by 5 times through capital allocation. Once your account loss reaches 30% or 40%, it will hit the warning line. At this time, you need to continue to add margin. Once the account assets fall to about 1 10% of the allocated funds, you will close your position.

Capital allocation is not as safe as margin financing and securities lending. Specific margin financing and securities lending is a business carried out by brokers, and fund-raising is a private peer-to-peer lending behavior. Once the fund-raising platform runs away, all the money you invested will be wasted, so you must use it carefully.