Excerpt from: Understanding Spread Betting
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| April 19, 2007 | | Leverage leads to higher risk | Leverage in spread betting is one of the advantages to placing spread bets. Leverage allows you to spread bet more than you have, and makes many of the profits in spread betting possible. However, with higher profits comes higher risk.
Leverage in spread betting also has a downside. The higher possibility of profits also means the possibility of greater losses. It is important to realize that leverage is both an advantage and a disadvantage in spread betting. Carefully manage your exposure to risk, and do not leverage more than you can tolerate.
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