To offset such high leverage, one would normally expect large asset sales, which could be used to pay down debt.
After the 1929 crash, blame was attached to the short sellers and to the use of high leverage to buy stocks.
It has to be optimized as a high leverage can bring a higher profit but create solvency risk.
By offering high leverage, the market maker encourages traders to trade extremely large positions.
A large difference in rates can be highly profitable for the trader, especially if high leverage is used.
The risk of loss is also amplified by the higher leverage.
But then the high leverage makes weak results seem even weaker.
They are mainly sold to a retail clientele looking for high leverage.
If you wanted it, and most people did, they also offered pretty high leverage on your deposit.
"Because of the high leverage, the promoter takes profits while the equity investors take all the risk."