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Leverage is a complex instrument risks from which are frequently misrepresented to retail traders. With a number of brokerages using leverage with a positive connotation that allows brokers to advertise to their prospective and existing clients the merits of gaining big while trading the market, few mention the inherent risks.
The higher the leverage in a transaction, the bigger the chance that the client can not only gain big, but also loose big in the market. In a number of cases that loss may well exceed a client’s personal funds held at the brokerage, or even worse – it may ... (read more)