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Glossary

Leverage effect: the potential of its use

Leverage is the mechanism that allows an entity to buy or sell financial assets for an amount greater than the capital held and therefore to obtain much higher profits. Of course, as in the positive case, you earn a lot, but in the case of loss, that is huge. Care must therefore be taken to use such mechanisms, which are common especially in the forex market.

Strategies

Strike price: the price level at which our contract will be converted

Before we talk about Strike price we need to take a small look at some concepts related to call and put options.