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Leverage instruments provide an opportunity for an equal yield amount compared to a direct investment in the underlying asset, but with a lower initial investment cost. Alternatively, the leverage instruments can be described as securities that offer higher returns (assuming a correct market view) compared to a direct investment in the underlying asset, provided that you have invested the same amount of money in the leverage instrument as in the underlying asset. The so-called leverage works both ways – with an incorrect market view and assuming that the investment amount in both the underlying asset and the leverage instrument are equal, you will lose more money with the leverage instrument than with the direct investment. Also, note that with the leverage instrument, you can lose the entire invested amount.
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