Student or Learner
Explanation of Leverage by investopedia:
"Leverage can be created through options, futures, margin and other financial instruments. For example, say you have $1,000 to invest. This amount could be invested in 10 shares of Microsoft stock, but to increase leverage, you could invest the $1,000 in five options contracts. You would then control 500 shares instead of just 10."
My question is:
Having $1,000 to buy 10 shares of Microsoft stock, that means the price of Microsoft stock is $100 , then how could you possibly control 500 shares of Microsoft stock by investing the $1,000 in five options conracts? By creating options the price of Microsoft stock will drop to $2?