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What is the most leverage possible?

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I want to know what is the most leverage possible that I can use. For example is if I just buy the shares in a company, my leverage would be X1. If I use 100% margin than my leverage would be X2. Buying a X2 ETF would be leverage X2. Buying X2 ETF with 100% margin would be X4. Using leverage power of X4 would be X4. Using leverage power with a X2 ETF would be x8.
Buy what about ? Lets say I using 100% of my capital for buy XYZ comapny at strike price 30 .46 and bought 31 , current 27. hat would give me X5 levarge. Than towards the end of expiration of that option and if im deep in the money, that leverage goes up tp .
Ok OK OK, hers the REAL question.. i dont know anything about futures, but I hear that it is already levered like X10-. So what if I bought some options on some futures? Would my leverage be something like X50-? I want to invest in the MOST levered possible way, becasue I know that a certain is going up. What is the most I can purchase?
x2, ETF?
Margin?
Options?
Futures?
Combo of some sort?
I want to know the exact multiplier number. like is it X10? x20 leverage?

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  1. Azrael 38 on Aug 24, 2011

    All futures and options are already on margin. They only question now is how much margin is required to buy the option or futures.

    Forex can easily be at least 100x, depending who your broker is. Some places that trade CFDs (contract for difference) may give you even more leverage, but their spreads are typically worse than actual markets.

    If you needed to trade on a commodity, then futures is your standard tool. The leverage you have depends on what commodity it is, but typically this is around 10x to 20x. Options on futures have around the same leverage as futures as the option is geared more, but the margin requirements are higher, so you get about the same end result.

    There’s nothing that’s a SURE THING, so please be careful. You can just as easily make a lot as lose a lot if markets suddenly change its mind and thinks something is overpriced (see 2008 for an example). If you don’t have much to lose, chances are you won’t be able to open an account.. If you have enough to lose, you might not want to lose it.



  2. Frank on Aug 24, 2011

    Borrow as much money as you can to buy futures. The limit is only your collateral and credit-worthiness.

    If you didn’t know this, then I highly doubt you have some special knowledge about a commodity that all of the professional traders don’t have.

    Someone gave you a tip. That’s worth the cost of the napkin it’s written on.

    However you leverage, you’re going to owe a huge amount of money if your futures don’t make money.

    Remember that futures don’t make much money when a commodity goes up. Futures make money when a commodity goes up more than expected. The expected increase is already priced in.

    Fortunately, you won’t be able to borrow on margin to lose your shirt.



  3. drmark27 on Aug 24, 2011

    I don’t know why a Top Contributor in Diet and Fitness is answering investing questions.

    To correct his mistake, though, I will tell you that the most leverage you can get is in Forex. Futures offers the next highest leverage.

    To learn more about futures, I’d suggest a basic book like _Dummies Guide to Futures Trading_.


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