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Leverage 1. Leverage is the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.  2. The amount of debt used to finance a firm's assets. A firm with significantly more debt than equity is considered to be highly leveraged. Leverage is most commonly used in real estate transactions through the use of mortgages to purchase a home.

Breaking it Down: 1. Leverage can be created through options, futures, margin and other financial instruments. For example, say you have $1,000 to invest. This amount could be... Read More