Leverage and gearing effectively mean the same thing: the process or effect of 'gearing up' or magnifying exposure to an investment strategy, manager or asset. Leverage can be achieved by borrowing capital or using
derivatives. A leveraged investment is subject to a multiplied effect in the profit or loss resulting from a comparatively small change in price. Thus leverage offers the opportunity to achieve enhanced returns, but at the same time can result in a loss that is proportionally great...
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