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General TradingG
Gearing
Gearing, also known as leverage, refers to the ratio of a company's debt to its equity or the use of borrowed funds to amplify trading positions. Higher gearing increases both potential returns and potential losses, making it a key measure of financial risk.
Example
“A company with a gearing ratio of 80% was considered highly leveraged, making its stock more volatile and sensitive to interest rate changes than lower-geared competitors.”