0xf8c3
March 29th, 2022

Underfunded companies may choose to use borrowed funds for production in order to boost their returns. However, it also increases the risk that if the business does not perform as planned, the company will end up with more debt than assets.

To put it simply, "leverage is taking debt (borrowing money) for your own business". Leverage can be achieved through borrowing or derivatives.

Likewise, in the stock market, leverage may provide a practical option when you don't have enough money to buy $50,000 worth of equity.

0xf8c3
March 28th, 2022

Articles on leverage.