Leverage

[Anonymous No.1711952]

Can someone explain me what leverage means? If I understand correctly it means the following
>you have 1000$, the stock is 100$ and the leverage is 1:10
>for 1000$ you can buy 100 stocks (1000$ x 100$ * 1/10 )

If a stock goes up by 1$ you will get 10$ becouse you "own" 100 stocks and it works the other way around.

Amirite biz?

[Anonymous No.1711958]

>>1711952
Finish your math class first before trying to trade stocks.

[Anonymous No.1711960]

>>1711952
That's it.

[Anonymous No.1711962]

>>1711960
thx m8

[Anonymous No.1712635]

>>1711962
Except you'll never get 1:10 leverage with stocks.
SEC won't allow that shit.
Futures and Forex, yes.

[Anonymous No.1712663]

>>1711952
Is literally borrowing money. The broker lends you some money, 1:9, would be 9 times the amount you have. You could open a position with 10, (9 + 1), times your initial capital.
You can only lose as much as you initially had. If the price drops 10 % you lose everything.

[Anonymous No.1712746]

>>1712663
It's actually more than that, though. Technically it's only leverage if you're getting more in returns than what you pay in interest.

[Anonymous No.1712862]

>>1712746
>getting more in returns
Having a dividend payer can help, as it will cover a percentage of the margin interest.

[Anonymous No.1713089]

>>1712663
How does this work for bitcoin?

Who lends you the money/coin? The exchange?

[Anonymous No.1713407]

>>1713089
Depends on the exchange. Usually the from other users through the exchange. User have an option to give their money for borrowing and make interest.

[Anonymous No.1714722]

>>1713407
How often does this happen

[Anonymous No.1714733]

dont play with leverage unless you have a large inventory of cash.. you need to have a safe liquidation price, so you dont get REK'd

[Anonymous No.1715497]

>>1714722
Very often, 98% of the time.