(redirected from lever)
Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.


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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson


Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005


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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Lever told his appeal hearing he felt unable to tell anyone about his problem because he feared losing his job, home and family.
It was in October 2010, while the couple were on a caravan holiday to Anglesey, when Lever violently attacked his wife for the first time.
This seems a funny way to start a list of lever-action fighting skills, but the fact is lever guns have a bad reputation for accidental discharges, and generally ADs occur while running live rounds through the action in order to empty the tubular magazine.
The class 1 lever has the weight at one end and the applied force at the other, while the fulcrum is placed somewhere between.
Lever pled guilty to breaking into the house, stealing PS30 and attempting to steal the laptop and urn.
I reckon the .338 Marlin Express is the most versatile cartridge ever offered in a traditional lever action.
Modeling and Compensation of Second-Level Rigid Lever Arm Error.
"Leading companies all over the world are choosing Lever's modern recruiting software to make talent a competitive differentiator.
Instead of taking stern action against lever transplant mafia, the officials of FIA including Inspector Asghar Baloch and constable Dost Mohammad have become the part of that gang after receiving Rs 5 million cash, luxury vehicle and other valuables from the gang, the application added.
Now plans are in place for a PS2.8m redevelopment of the Lady Lever, which will restore it to its glory while making it a gallery fit for the future.
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).
A secondary purpose of our study was to confirm that lever propulsion is more efficient than hand rim propulsion.