Leverage is a trading concept that can be tricky to grasp. It's essentially using borrowed money to increase potential returns. For example, let's say you have 10 units of an asset and you borrow 40 more units. You now have 50 units, but you'll have to pay back the 40 units you borrowed, plus interest. If the value of the asset increases by 10%, you'll have 55 units, but you'll still have to pay back 40 units, plus interest. This can be a double-edged sword, as it can increase potential gains, but also increase potential losses. Consider a scenario where you have 10 units and you use 5 times leverage, you'll have 50 units, but a 10% loss would be 5 times bigger. #TradFi #Investing #RiskManagement