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Topic
Leverage
13 guides in Finabase Learn
- Buying on margin: how margin loans, interest and leverage work How buying stock on margin works under Reg T and FINRA rules, what interest costs, and how leverage magnifies gains and losses, with fully worked examples.
- Currency pairs and pips: quotes, lots, pip value and leverage How to read a currency quote, what a pip and a lot are, how to calculate pip value in dollars for any pair, and what US retail forex leverage limits mean in practice.
- Debt-to-Equity Ratio Total debt (or total liabilities) divided by shareholders' equity; a measure of how much a company relies on borrowing.
- Debt-to-equity ratio: formula, versions and when it misleads How to calculate the debt-to-equity ratio, why versions differ, and why Apple’s 1.34 D/E hides a net cash position, with net debt, debt/EBITDA and its note maturities.
- Futures contract A standardized exchange-traded agreement to buy or sell an asset at a set price on a future date, marked to market daily.
- Futures margin and leverage: initial, maintenance and margin calls How futures margin works as a performance bond: initial and maintenance levels, daily variation margin, margin calls and leverage, worked through one crude contract.
- Initial margin The share of a purchase price an investor must pay with their own money when buying on margin; 50% for US stocks under Regulation T.
- Interest coverage ratio Operating profit (EBIT) divided by interest expense; how many times over a company can pay the interest on its debt.
- Inverse ETF An ETF designed to return the opposite of an index's daily move, using derivatives; it decays when held over volatile periods.
- Leveraged ETF An ETF that aims for a multiple, such as 2x or 3x, of an index's daily return; compounding makes long-run results diverge.
- Margin account A brokerage account that lets the holder borrow from the broker against securities to buy more or to sell short.
- Options risks and approval levels: what brokers check and why How US brokers approve options accounts under FINRA Rule 2360, what approval tiers usually allow, and the main risks: leverage, undefined loss and liquidity.
- Return on equity (ROE): formula, DuPont analysis and pitfalls How to calculate return on equity on average or ending equity, split it with DuPont analysis, and see why Apple’s 171% ROE says more about buybacks than profit.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.