Leverage \ The ability to control a larger amount of money with a smaller amount
Used in the context of general equities. For corporations, property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage relative to the underlying stock because a price change in the stock may result in a relatively large increase or decrease in the value of the option. The use of debt financing.
1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.
In the US, the ratio of a company"s long term debt, typically bonds and preferred stock, to its equity in its capital structure. The greater the long term debt, the greater the leverage.
Leverage / the ability to control a larger amount of money with a smaller amount
used in the context of general equities. for corporations, property of rising or falling at a proportionally greater amount than comparable investments. for example, an option is said to have high leverage relative to the underlying stock because a price change in the stock may result in a relatively large increase or decrease in the value of the option. the use of debt financing.
1. the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.
in the us, the ratio of a company"s long term debt, typically bonds and preferred stock, to its equity in its capital structure. the greater the long term debt, the greater the leverage.
Leverage