Leverage

n. action of a lever; mechanical power supplied by a lever; influence, ability to affect or alter people or circumstances; use of borrowed money to increase the return on an investment

v. use one's influence to affect people or circumstances; increase the return on an investment by using borrowed money

For other senses of this word, see leverage (disambiguation) Leverage is a factor by which lever multiplies a force - it is therefore related to mechanical advantage. The useful work done is the energy applied, which is force times distance. Therefore a small force applied over a long distance is the same amount of work as a large force applied over a small distance. The trick is converting the one into the other. The requisite mathematics was developed in the third century B.C. by Archimedes.
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Noun
1. the mechanical advantage gained by being in a position to use a lever
(synonym) purchase
(hypernym) mechanical phenomenon
(derivation) pry, prise, prize, lever, jimmy
2. strategic advantage; power to act effectively; "relatively small groups can sometimes exert immense political leverage"
(hypernym) advantage, vantage
(hyponym) bargaining chip
3. investing with borrowed money as a way to amplify potential gains (at the risk of greater losses)
(synonym) leveraging
(hypernym) investing, investment
Verb
1. supplement with leverage; "leverage the money that is already available"
(hypernym) supplement
(derivation) leveraging
2. provide with leverage; "We need to leverage this company"
(hypernym) supply, provide, render, furnish
(derivation) leveraging

(n.)
The action of a lever; mechanical advantage gained by the lever.
  

Used in the context of general equities. For corporations, property of rising or falling at a proportionally greater amount than comparable investments. For example, an option is said to have high leverage relative to the underlying stock because a price change in the stock may result in a relatively large increase or decrease in the value of the option. The use of debt financing.