Leverage allows you to open a trade using a small portion of your actual balance and borrowing the rest.

Let´s assume you wish to open a position worth $100,000. Without any leverage on your account (1:1), you would have to put up the full value of your position in funds to open it ($100,000).

However, using an example of 100:1 leverage on your account, you would only need $1,000 in funds to open and maintain that position.

Leverage is often called a "double-edged" sword as using it magnifies both potential profits and potential losses a trader could occur. The higher the leverage, the higher the potential profit/loss and risk.