Debt is a type of liability. It is an obligation by one party (the debtor) to another (the creditor). Debt can also be seen as negative equity. Usually, the debtor agrees to pay back his loan with interest, at an agreed interest rate.

Other financial instruments that are debt-based are bonds and certain types of derivatives.

Debt in trading

The concept of leverage allows you to borrow money from your online broker. This allows you to trade at a bigger margin.

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