Leverage is any technique involving borrowing funds to buy things, hoping that future profits will be many times more than the cost of borrowing. Successful leveraging amplifies the comparatively small amount of money needed for borrowing into large amounts of profit. However, the technique also involves the high risk of not being able to pay the borrowed money back.

Examples:
Rahul wants to buy a house of 100000 rupees but he only has 20,000 in his account. So he takes a mortgage of 80,000 and uses 20,000 as down payment. He is taking a risk that in future the value of the house will increase and he will sell it off at a higher price and gain a profit.