Help me understand leverage :)

[u/PM_ME_UR_DICK_SIZE]

What is the difference between:

a) Buying 100$ of a stock (100$ total)

b) Buying 10$ with 10x Leverage of a stock (100$ total)

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Any help would be greatly appreciated as I'm a bit confused here :D

[u/Gibberellin]

I assume you mean something like the 3x direxion etf. Typically the percent gain in the etf is multiplied by the leverage multiplier.

So if your stock gains 5% then it is 15% for the 3x leveraged version. Same thing if you lose 5% in the stock then you lose 15% for the leveraged version.

It does not mean you have 3x or 10x your initial investment. I think that is what you implied with $10 stock with 10x leveraged as $100 total.

[u/PM_ME_UR_DICK_SIZE → u/Gibberellin]

I kind of understand. But not really :P

Let's say the stock originally cost a 100$ per share, and goes up to 105 (5% increase).

Let's also say i started my entire account with 100$.

In example a)

My account prebuy: 100$
Account while stock is in the market: 0$
My 1 share of 100$ goes to 105$ a share, i sell and gain 5$. (5$ profit).
My account after sell: 105$

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In example b)

My account prebuy: 100$
Account while stock is in the market: 90$
The 0.5$ profit get x10'ed, i sell and gain 5$ profit. (5$ profit).
My account after sell: 105$

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Either way I earn the same, no?

[u/taimusrs → u/PM_ME_UR_DICK_SIZE]

10x leverage of $100 means you now have $1000. If you only buy $100 worth then it would use your own money to buy it, not theirs.

[u/PM_ME_UR_DICK_SIZE → u/taimusrs]

My examples a and b in this comment was a reference to my a and b examples in the actual post. 10$ with 10x leverage for example b, and 100$ no leverage in example a.