The Leverage Industrial Complex

On the manufacture of confidence at scale.

R. Okonkwo-Feld, Head of Conviction · August 2026

Leverage is not a tool for expressing a view. It is a tool for expressing a view faster, including the part where the view turns out to be wrong.

A 2x position is a normal opinion. A 4x position is the same opinion with the time axis compressed. Nothing about the analysis improved; the schedule simply became less forgiving.

This is generally described as "expressing conviction." We prefer the more literal description: purchasing a shorter deadline.

The arithmetic nobody prints

At 4x, the underlying needs to fall roughly 24.6% for the position to be closed for you. At 10x, roughly 9.6%. At 20x, roughly 4.5%. These are not exotic moves. In this asset class they are Tuesdays.

You can verify each of these figures on our simulator, which computes them from the same formula every exchange uses. We built it because we could not find the number in any of our own research.

The industrial part

The complex is industrial because each component is individually reasonable. The exchange offers the leverage because it is demanded. The demand exists because returns are compared without reference to the leverage that produced them. The comparison is made because the leverage is not in the headline figure.

No participant in this chain is behaving irrationally. The chain still produces the outcome.

Position

We remain constructive on leverage as a concept and completely unable to use it responsibly. We consider these views compatible.

R. Okonkwo-Feld is a fictional analyst. This report is satire and describes no real person, fund, or position.

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Nothing in this report is financial advice and no figure here predicts a price. The arithmetic is real; the conviction is ours. Use your situational awareness.