Hi all,
For long term investment, is leverage (eg: using CFD or options) advisable?
For CFDs, there are platforms such as XM.com that offers leverage as high as 100x but charges interests on the leveraged amount and the range of companies is limited. For options, there is added complexity to manage the expiry and value decay. So is keeping it simple by just buying the shares the best option? Thank you.
For CFDs, there are platforms such as XM.com that offers leverage as high as 100x but charges interests on the leveraged amount and the range of companies is limited. For options, there is added complexity to manage the expiry and value decay. So is keeping it simple by just buying the shares the best option? Thank you.
1 Answers
Hi YJ,
Personally, I don't do it and will not advise using leverage on stock investing. Leverage is best used when the asset class is less volatile, for example, property.
I had seen friends who use leverage on stocks and made lots of money during the good times. When a sudden black swan event came, they ended up with a margin call and the gain can't cover the losses.
Personally, I don't do it and will not advise using leverage on stock investing. Leverage is best used when the asset class is less volatile, for example, property.
I had seen friends who use leverage on stocks and made lots of money during the good times. When a sudden black swan event came, they ended up with a margin call and the gain can't cover the losses.
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