Home > Terms > English, UK (UE) > Leverage

Leverage

Means of enhancing profitability using borrowed money by exploiting the fact that the rate of interest on equity capital is higher than the interest payable on borrowed funds. A leverage effect can also be achieved with derivatives, enabling market operators to invest in sizeable holdings of an underlying for a relatively modest capital outlay. The upshot of leveraging is that any percentage change in the gains and losses on options and futures contracts will be larger than the corresponding change in the underlying.

This is auto-generated content. You can help to improve it.
0
Improve it
More
Collect to Blossary

Other Languages:

More

Member comments

You have to log in to post to discussions.

Related terms

leverage
Financial services; Real estate investment

Leverage is the use of financing to acquire real estate investments. The amount of leverage on real property will be the ratio of the debt to the purchase price.

leverage
Banking; Investment banking

Means of enhancing profitability using borrowed money by exploiting the fact that the rate of interest on equity capital is higher than the interest payable on borrowed funds. A ...

leverage
Financial services; Commodity exchange

The ability to control large dollar amounts of a commodity with a comparatively small amount of capital.

leverage
Military; Missile defense

1. The advantage gained by boost-phase intercept, when a single booster kill may eliminate many RVs and decoys before they are deployed. This could provide a favorable ...

leverage
Military; General military

In the context of joint operation planning, a relative advantage in combat power and/or other circumstances against the adversary across one or more domains (air, land, sea, and ...

dirty floating
Banking; Investment banking

Currency policy which in principle recognizes the free movement of exchange rates but where interventions are nonetheless made with some frequency in an attempt to influence the ...

economic viability
Banking; Investment banking

Credit system mainly used in property financing and defined as the burden on the borrower's income (expressed as a percentage) that the cost of a property will incur.

summary bill enforcement procedure
Banking; Investment banking

Especially rapid summary bankruptcy proceedings brought against bill and cheque debtors whose names are entered in the commercial register.

share index
Banking; Investment banking

Indicator showing changes in the average prices of shares or groups of shares on the stock market. In Switzerland the most commonly used equity price indices are the Swiss ...

benchmark
Banking; Investment banking

Reference parameter (e.g. a share index or an index portfolio) used to compare the performance of a portfolio. A benchmark that is an index is also called a reference index.

standing order
Banking; Investment banking

Payment product which enables the client to give an order to the bank to make regular payments for the same amount and execution date.

Terms in the News

Featured Terms

Harry8L
  • 0

    Terms

  • 0

    Blossaries

  • 1

    Followers

Industry/Domain: Geography Category: Cities & towns

Nairobi

Nairobi is the capital and largest city of Kenya. The city and its surrounding area also forms the Nairobi County. The name "Nairobi" comes ...

Contributor

Featured blossaries

sophisticated terms of economic theory

Category: Business   2 20 Terms

BrazilianPortuguese English

Category: Education   1 1 Terms

Browers Terms By Category

TERMS

SOCIAL

EXTRAS

SOLUTIONS