Understanding Leverage

Through the decades, leverage has made it imaginable for millions of human beings to own homes that they could not have afforded without securing a loan from a bank. This is the most common example of leverage in the investment earth, much though most human beings probably wouldn't reckon of their mortgage as an investment. However since it is employing a relatively small amount of money to control an asset that is worth much, much more than this amount, your house mortgage certainly does qualify as a leveraged investment. Stock options are also leveraged investments, though they have a couple of differences that distinguish them from mortgage loans. Once you know both of these investments you should have a excellent handle on leverage per se. More information: click here.