What is leverage that everyone often talks about?

You only have 10,000 yuan, which is too little. You want to trade stocks and Bitcoin, but it is not enough. What should you do? Don't worry, I am a broker, and I will lend you 90,000 yuan. You use 10,000 yuan of principal to trade 100,000 yuan of stocks and Bitcoin. This is leverage, which is 10 times the financial leverage.

So why did the broker lend you 90,000 yuan? Is the brokerage company a philanthropist? Of course not. The brokerage company lends you money on request.

Have you ever thought about how big the risk is?

You used 10,000 yuan of principal and made a profit of 100,000 yuan. 100,000 plus leverage, a profit of 1 million yuan. 1 million plus leverage, a profit of 10 million yuan. The brokerage gives you 100 times leverage, and you dare to use 100,000 yuan to make a profit of 100 million yuan. Get rich overnight. Is it exciting? Human greed is a bottomless pit.

Someone took 100,000 yuan, added 1,000 times leverage, and made 100 million yuan in the stock market in 4 days. This is not nonsense. This is a real case. Get rich overnight! !

If you make money, you will share part of the broker's profit.

But what if your stock falls? From 100,000 yuan to 90,000 yuan, the broker will ask you to cover your position and make up your 10,000 yuan principal. If you don't cover your position, the broker will force you to close your position and force you to sell your stocks, and the broker will take back its own 90,000 yuan, which is a margin call. Your loss is your own, and the broker does not bear the loss.

Then you say, don't worry, I'll go back tomorrow, wait a little longer. Sorry, the broker will not wait and force you to close your position immediately. Even if the broker sells too late, the 90,000 yuan principal is not enough, and you have to bear the broker's loss.

So we often see in the news that when a certain stock falls, Bitcoin only falls by a few thousand dollars, and tens of thousands or even hundreds of thousands of people around the world are liquidated. This is the reason. Many people use several times or even dozens of times of leverage to speculate in stocks. After the explosion, they lose all their money, the principal is gone, and they still owe the broker a large sum of money, and they are in the worst-hit area. They are heavily in debt and finally have to jump off the building.

In short! Human greed is endless!

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