Questions tagged [leverage]
Leverage is (1) the strategy of borrowing money to increase the potential return of an investment or (2) the amount of debt a firm uses to finance assets.
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Why does the *leverage* of an open-ended option change over time (and so quickly)?
I wonder how the leverage (not the price) of an option changes over time and why so quickly?
Naively speaking, I think of an option as the possibility to buy a stock at a certain price. If an option ...
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What's funny about "He leveraged his @#% deep into soy beans and cocoa futures" in The Jerk (1979)?
Near the end of the comedy The Jerk (1979), a character explains how their family got rich:
Father: All I did was take the money you sent home and embarked on a periodic investment, in a no-load ...
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Are leveraged risk-parity portfolios too good be true?
I was reading the bogleheads forum and it seems that lifecycle investing or leveraging a mixed portfolio of stocks and bonds have popular topics for a while now. Whether you achieve it through box-...
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What's the case against being 1.3x levered in PA if you're in your 20s?
If you're in your late 20s and own a bunch of SPY and diversified stocks, why shouldn't you be 1.3x levered?
2.0x levered seems too aggressive given there are 50% drawdowns to the S&P occasionaly.
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Is betting on "isolated margin" just crazy fun or financial folly
First off, no, I am not trolling, I have actually pondered this question.
Some entities offer in advertising a 10,000x pseudo-leverage on so-called "isolated margin" gaming. Now, I've ...
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Risks of leveraged government bonds
Given that Treasury bills are theoretically assumed to be risk-free investments (not going into whether they really are or not), is there any reason anyone who is planning on keeping the bonds until ...
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If interest rates remain the same, what effect would this have on long term treasuries?
I'm interested in gambling a few thousand on TMF, a triple-leveraged 20+ year bond fund. It tracks the daily returns of the ICE US Treasury 20+ Year Bond Index.
If the Fed neither raises nor lowers ...
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Credit Investing - Best Metric To Compare Spread / Yield Per Unit of Risk
Do people investing in credit (leveraged loans / high yield) that want to compare different industries / different valued businesses ever look at spread per turn of LTV (or the inverse, 1/LTV = asset ...
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Market Line of Credit vs Debt - where to prioritize?
Scenario
I have an etrade Line Of Credit that is leveraged against a brokerage account with rather aggressive nyse etfs (heavy in nasdaq).
Brokerage acct total 330k
LOC total 150k
Rather than pay ...
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Which expiration date and strike price gives the highest delta theta ratio & leverage?
I want to gain exposure to the underlying portfolio (long some stocks, while short some stocks) using options. While I have limited cash for margin, so I have a hard time figuring out the exp date and ...
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Why less leverage is allowed for cryptocurrency Spot trading?
I realized brokers and exchanges allow high leverage for Futures, Options and Forex listings but not so much for spot listings.
For example in Kraken Futures you can get 50x leverage for BTC-Perpetual,...
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How to estimate or determine leverage from strike price on ITM call option?
In this text 4x leverage is mentioned:
"ITM call options have a strike (X) below spot price (S). ITM call
option position is determined by aiming for ~4x leverage. The position
size is set at 33%...
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Will SQQQ go back to 2018 level if QQQ will?
It's a theoretical question, but i am not able to figure it out. Is the relation between SQQQ and QQQ close enough to expect SQQQ go back to where it was at certain point in time, if QQQ goes back to ...
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How to calculate leverage ratio while buying stocks?
I was recently studying 2008 research study by Yale researchers Ian Ayres and Barry J. Nalebuff in which they tell to use 2 to 1 leverage ratio while buying stocks in your young age and gradually ...
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Can I see how a company is using its debt?
How can I understand the way that way a company is using its borrowed funds?
From the balance sheet I can see how much debt the company issued, and how much is paid back. But how can I see if the debt ...
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