Does 5x leverage mean 5x profit?

This means that you are able to control a larger portion of the market with the same initial investment. However, it's crucial to understand that while the potential for profit increases, so does the risk of loss.

Leverage trading allows investors to amplify their purchasing power by borrowing funds from their broker. For instance, if a stockbroker offers 5 times leverage and you have enough capital to purchase 70 shares of Reliance without leverage, you can instead buy 350 shares with the same amount of money.

In the case of Reliance shares, with 5 times leverage, every movement in the stock price will be felt 5 times more intensely in your account. If the stock price goes up, your profits will multiply accordingly.

Conversely, if the stock price declines, your losses will also be multiplied by 5. This can lead to significant financial losses, especially if the market moves against your position.

It's essential to carefully manage risk when trading with leverage. Investors should thoroughly understand the risks involved and ensure they have sufficient knowledge and experience to make informed decisions.