You are right and you are also wrong. Firstly, futures are leveraged because you can pay margin and take a much larger position than what you can afford in the cash market. However, it has a cost in terms of mark to market margins. This is where most futures traders get it wrong! For example, if you have Rs.10 lakhs available, you can buy 1000 shares of Reliance in the cash market. Alternatively you can buy 8 lots (based on margin payable on futures). When you leverage yourself in the futures market, you can feel satisfied that your profits will multiply if the trade works in your favour. The problem is that your losses could also multiply if the trade works against you. Also, you are required to infuse MTM margins if the price goes against. If you fail to deposit margins, your position will be cut at a loss. While it is true that margins on futures give you leverage, don’t get into leveraged positions without the understanding the underlying risks.