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Glite Dictionary
🗣️ Influence power 🔧 To use for gain 💸 Borrowed money use ⚙️ Force advantage
leverage

leverage

28 7.2
The use of borrowed money to increase investment returns while raising risk
  • noun
  • /ˈlɛvərɪdʒ/
  • Specialized
translation icon : apalancamiento
  • Investors can substantially reduce fees by controlling the amount of leverage and avoiding commitment fees and catch-ups.
  • high leverage
  • financial leverage
  • increase leverage

I use real estate as leverage to buy this, right.

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Examples

  • In 2004, Henry Paulson, the CEO of Goldman Sachs, helped lobby the SEC to relax limits on leverage, allowing the banks to sharply increase their borrowing.

    Inside Job (2010)

  • Therefore, increasing leverage creates a direct boost to the total fee load, implying more profits for the manager.

    Academic text (2017)

  • Therefore, leverage seems to be an easy way for fund managers to increase income.

    Academic text (2017)

  • Additionally, there is evidence that firms with greater levels of leverage experience higher levels of premium growth than other firms.

    Academic text (2016)

  • Health plans gained financial leverage over hospitals and subsequently reduced their payments.

    Academic text (2001)

  • Buyers don't have leverage to control prices.

  • Brokers that supply leverage to hedge funds have grown more insistent on understanding their clients' risks.

    Academic text (2007)

  • Limited liquidity, especially during periods of higher leverage, is stressful for both borrowers and lenders.

    Academic text (2018)

  • The Coushattas had clearly demonstrated their political acumen and their economic leverage in Southwest Louisiana.

    Academic text (2017)

  • The company's high leverage allowed it to take on larger projects than its competitors.

Synonyms

borrowing
vsleverage
60 2.3

Getting money from a person or bank that you must pay back with interest

focuses on using money from others specifically to increase investment returns and risk
leveraging
vsleverage
  • Specialized
7.7

Using borrowed money to make bigger profits and raise risk

means the same strategy but refers to the general financial approach
borrowed capital
vsleverage
  • Specialized
4.8

Money a business gets from others that it must pay back with interest

is using that money specifically to boost returns while raising risk

Antonyms

to deleveraging
  • Specialized
8.1

To reduce debt by paying off loans or selling things you own

Surface Forms

leverage singular
leverages plural

Morphology

leverage = lever (opaque) = lever + age

The form is built from 'lever' + '-age', but the finance sense is a metaphorical extension of mechanical leverage and is not directly predictable from the parts.

Etymology

Leverage comes from the simple tool lever and the Latin word levare 'to raise'. Think of using a lever to lift more weight with a small push: in finance, 'leverage' means using borrowed money to try to raise your profits, and that also raises your risk.