Leverage is a concept that can enable you to multiply your exposure to a financial market without committing extra investment capital.
In investing, the amount needed to open and maintain a leveraged trade is called the margin. Trading using leverage is sometimes referred to as margin trading.
Leverage is available on several financial products, including CFDs and forex trades. When trading using leverage, the provider will only ask for a fraction of the total value of your position: the rest is effectively lent to you by the provider.
Profits and losses are based on the total size of the position, so the end result of a trade can be much larger than the initial outlay. Losses can end up exceeding deposits.
