Glossary · Trading basics · L

Leverage in plain English.

Controlling a large position with little capital. A $2.45 call controls 100 shares for $245, so gains and losses are a much bigger percentage of the money put in.

Track

Trading basics

29 terms in this track

Taught in

Long calls and puts: directional options

In the index

62 of 129

Filed under L

Connections

8

Related terms mapped below

01

The idea, in context

How to read the picture above and where the Academy teaches it.

Reading the illustration

Strikes around today’s price, drawn for a put: strikes above the price are in the money, below it out of the money.

In French: Effet de levier

Where it’s taught

Trading basics

Long calls and puts: directional options

“Long calls and puts: directional options” introduces this term with worked examples, a quiz and the trades around it. The Academy is part of the YieldCove membership.

02

8 terms around this one — the words its definition uses, its lesson siblings and the terms that build on it.

03

Where to go next

Understand it, try it with real numbers, then track it for free.

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