Help me understand "Leverage"

so im reading and everywhere i see, leverage is pretty much 200:1, 100:1 50:1 etc. so ppl can get a bigger return or you can lose your money quicker.

but how does it ACTUALLY work? because you will still need the margin for it right? and if you lose a trade using leverage, do you have to pay it back?

anyone?

Try Investopedia.com

Leverage is like a loan. A ratio of 200:1 means that for every dollar in your net asset value, your broker will let you use $200 for a trade (i.e. loaning you the other $199).

If you say have $100 in your account, a 200:1 leverage would mean that the broker will let you use $20,000 for a trade.

Yes you do have to pay it back, but this is paid back automatically when you close your trade.

EDIT: Forgot to mention that any profits you make using the leverage are yours to keep.

This is why brokers have margin-calls. So if you have used a high amount of leverage, it will not cause your account balance to go below $0 if your trade goes the other way on you.

Use it wisely