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The use of debt financing, or property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage compared to the underlying stock because a given price change in the stock may result in a greater increase or decrease in the value of the option. Also, commonly known as Gearing in Europe.


1. To use debt to finance an activity. For example, one usually borrows money in the form of a mortgage to buy a house. One commonly speaks of this as leveraging the house. Likewise, one leverages when one uses a margin in order to purchase securities.

2. The amount of debt that has been used to finance activities. A company with much more debt than equity is generally called "highly leveraged." Too much leverage is thought to be unhealthy, but many firms use leverage in order to expand operations.


The use of fixed costs in order to increase the rate of return from an investment. One example of leverage is buying securities on margin. While leverage can operate to increase rates of return, it also increases the amount of risk inherent in an investment. See also financial leverage, operating leverage.


Leverage is an investment technique in which you use a small amount of your own money to make an investment of much larger value. In that way, leverage gives you significant financial power.

For example, if you borrow 90% of the cost of a home, you are using the leverage to buy a much more expensive property than you could have afforded by paying cash.

If you sell the property for more than you borrowed, the profit is entirely yours. The reverse is also true. If you sell at a loss, the amount you borrowed is still due and the entire loss is yours.

Buying stock on margin is a type of leverage, as is buying a futures or options contract.

Leveraging can be risky if the underlying instrument doesn't perform as you anticipate. At the very least, you may lose your investment principal plus any money you borrowed to make the purchase.

With some leveraged investments, you could be responsible for even larger losses if the value of the underlying product drops significantly.






The effect borrowed money has on an investment;the concept of borrowing money to buy an asset that will appreciate in value, so that the ultimate sale will return profits on the equity invested and on the borrowed funds.

Example: Mark and Amy each have $100,000 to invest. They can buy rental houses for $100,000 per house and collect rent of $1,100 per month for each house. At the end of 5 years, they will be able to liquidate and sell their houses for $150,000 each. Amy uses leverage and Mark does not.

References in periodicals archive ?
Five Levers to Improve Learning: How to Prioritize for Powerful Results in Your School
From Page 23 PRIVATE VIEWING: Lord Leverhulme in the Lady Lever Gallery on its opening BLUEPRINT: A drawing of how the gallery and its approach would appear SPLENDOUR: Left, the gallery as it still appears today LAVISH: One room inside the gallery, below ALL GO: Once the King pressed a button on the model, inset, by electric current the real stone was lowered into place Photos: LEVERHULME FAMILY ARCHIVE GRAND
Therefore, the discrepancies in results between Experiments 1 and 2 were more likely due to the way in which the asymmetrical CO requirements interacted with the RI schedules; whereas in Experiment 1 the RI schedules were dependently arranged obligating animals to visit both alternatives (forced choice), in Experiment 2 the RI schedules were independently arranged allowing room for exclusive preference for the lever with the lowest switching-into requirement (Aparicio and Jimenez 2007).
During the forward push phase of the lever stroke, torque is transmitted to the wheels through the belt and pulley mechanism while a torsion spring located in the pulley is tensioned.
With a higher spout, reduced body and shorter lever, it is ideal for the requirements of small and medium-sized washbasins, commented a company spokesperson.
Lever, of Earlsdon Avenue North, Earlsdon, Coventry, was due to appear in court again in August, but failed to show up.
The Lever Brothers was a British company founded in 1885 by William Hesketh Lever and his brother, James Darcy Lever.
After removing the padlock from the lock lever, don't kick the lever to open the hatch.
Nonetheless an American hunter was still far more likely to carry a lever rifle than any bolt action.
Al Oude Art Production & Distribution is organising the Johnny Lever musical night concert.
To prevent the power levers from retarding out of the flight range, there is an item on the landing checklist: Power Lever Lock--AS REQUIRED.