Definition of Leverage

Financial Terms Beginning with L

What is Leverage

Leverage is a financial technique that allows a party to use borrowed funds or debt to increase their buying power for purchasing an asset or equity. Leverage is advantageous for an investor when the asset increases in value above the borrowing cost as leverage acts as a multiplier.

The risk to leverage is if the asset value does not increase above the borrowing cost or, even worse, the asset decreases in value. The multiplier effect to losses could result in an investor losing more than their principal investment.

Leverage is a common tool for hedge funds and asset managers who are trying to accelerate profits and maximize results. In the UK and Australia, leverage is also known as gearing.

GlobEx Markets Financial Dictionary of Terms, Phrases and Concepts

The GlobEx Markets financial dictionary is a reference resource that provides the definitions and explanations of various financial terms, phrases and concepts that are used in international finance and global investing. It includes a broad range of financial terms, such as those related to stocks, bonds, currencies, commodities, options, futures, crypto and much more.

A financial dictionary can be useful for anyone who wants to learn more about finance and investing, or who works in the financial industry. It can help clarify the meaning of technical terms and the language used in financial publications, reports and other sources.

Benefits of the GlobEx Markets Financial Dictionary

There are several benefits to using the GlobEx Markets financial dictionary, including:

  • Clarifying Technical Terminology: The financial world is filled with complex terms and language that can be confusing to those who are not familiar with it. A financial dictionary can help clarify the meaning of technical terms and make them more understandable.
  • Improving Financial Literacy: By learning the meaning of financial terms, phrases and concepts, you can improve your overall financial literacy and gain a better understanding of the workings of the financial world.
  • Enhancing Communication: A financial dictionary can help improve communication among financial professionals by ensuring that everyone is using the same terminology, phrases and concepts.
  • Supporting Research: When conducting financial research or analysis, a financial dictionary can be a valuable resource for identifying and understanding key terms, phrases and concepts.
  • Facilitating Decision-Making: Understanding financial terms, phrases and concepts can help you make better-informed financial decisions, whether you are managing your own finances or making decisions on behalf of an organization.

Overall, the GlobEx Markets financial dictionary can help improve your understanding of international finance and global investing. It is a valuable tool for anyone who works in the financial industry or who wants to improve their financial literacy.

Related Investment Terms

130-30 Strategy

Hedge Fund


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