Leverage refers to the use of borrowed funds, debt, or financial instruments to amplify returns, magnify investment gains, or control a larger position than would be possible with equity alone. Leverage allows investors and businesses to increase their exposure to assets or investments by using borrowed capital, thereby potentially increasing potential profits or losses. Common forms of leverage include margin trading in securities markets, where investors borrow funds from brokers to purchase securities, and leverage in corporate finance, where companies use debt to finance operations, acquisitions, or capital expenditures. While leverage can enhance returns in favorable market conditions, it also increases the risk of financial losses, as borrowed funds must be repaid with interest, regardless of investment performance. Excessive leverage can lead to financial distress, liquidity problems, and insolvency, especially during market downturns or adverse events. Understanding leverage is essential for investors, traders, and businesses to assess risk-return trade-offs, manage debt levels, and implement prudent risk management strategies to safeguard financial stability and long-term viability.