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The leverage available using futures contracts appears to be a great opportunity. Should the entire investible funds be used for leveraging?

April 26, 2017appears contracts entire funds Futures great investible leverage opportunity Used

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The leverage available using futures contracts appears to be a great opportunity. Should the entire investible funds be used for leveraging?

1 Answer

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10 Posted

Never! Leverage is like a double edged sword. Yes, the user can benefit immensely in terms of the return on capital employed if used properly. Leverage can burn its user equally severely if it is not used judiciously. The amount to be used for leveraged trades should form a part of the risk capital.