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What is Leverage in Stock Market

Leverage in the stock market means using borrowed funds or margin to increase your buying power. It allows investors to take larger positions than their own capital would permit, potentially amplifying profits. However, it also magnifies losses, making risk management crucial when trading with leverage.

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What is Leverage in Stock Market

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  1. Read blog - https://navia.co.in/blog/what-is-leverage-in-the-stock-market/ What is Leverage in Stock Market

  2. Read blog - https://navia.co.in/blog/what-is-leverage-in-the-stock-market/ Introduction to Leverage Trading • In today’s fast-paced stock market, leverage is a popular strategy. • It lets you increase market exposure using borrowed funds. • Leverage can amplify profits, but it also magnifies risks. • A proper understanding is essential for both beginners & experienced traders.

  3. Read blog - https://navia.co.in/blog/what-is-leverage-in-the-stock-market/ What is Leverage in Stock Market? • Definition: Using borrowed capital to increase investment potential. • Small capital + borrowed funds = Larger exposure to stocks. • Example: With 5:1 leverage, investing ₹1,000 lets you control stocks worth ₹5,000.

  4. Read blog - https://navia.co.in/blog/what-is-leverage-in-the-stock-market/ How Does Leverage Work? Without Leverage: • Buy 10 shares @ ₹100 = ₹1,000 investment. With 5:1 Leverage: • Control 100 shares @ ₹100 = ₹10,000 exposure. • Invest only ₹2,000, borrow ₹8,000. • If stock rises to ₹110 → Profit = ₹1,000 (50% gain). • If stock falls to ₹90 → Loss = ₹1,000 (50% loss).

  5. Read blog - https://navia.co.in/blog/what-is-leverage-in-the-stock-market/ Key Takeaway • Pros: Higher returns with small capital, more market opportunities. • Cons: Magnified losses, risk of margin calls, potential capital wipeout. • Moral: Leverage is a double-edged sword—use it wisely with risk management!

  6. Disclaimer Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are for illustrative purposes and are not intended as recommendations. Brokerage will not exceed the SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI Registration No. for DP: IN-DP-311-2017-GST Registration number :33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, Nungambakkam High Road, Chennai - 600 034 Email ID: ig@navia.co.in - Contact No: +91 70100 75500 https://bit.ly/naviadisclaimer Read blog - https://navia.co.in/blog/what-is-leverage-in-the-stock-market/

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