Leverage
Borrowing money to trade with a larger position than your actual balance.
Leverage means trading with borrowed funds so you can open a position
that’s bigger than the money you actually have.
For example, with 10× leverage, a $100 balance lets you trade as if you had $1,000.
This can multiply both your profits and losses.
Why traders use leverage
- To amplify profits with small price moves
- To hedge existing positions
- To participate in markets with limited capital
The risk
Leverage is a double-edged sword.
If the trade moves against you, your position can be liquidated —
meaning it’s automatically closed and your margin is lost.
Even experienced traders use low leverage (like 2×–3×)
because markets can move faster than expected.
💡 Lanzo Tip
Leverage can boost returns, but treat it like a power tool —
great in skilled hands, dangerous for beginners.
Start small, learn risk management, and never risk what you can’t afford to lose ⚡️