Thanks for the reply but you didn't answer my question at all, you simply described what leverage trading is. I know what leverage trading is. I'm asking about a specific scenario or form of arbitrage, where by one would earn a return while only subject to counter party risk of default.
Another method would be buying spot, and selling a future contract for a future date listed at a higher price. I asked about my example though because I believe the returns via funding would exceed the spot-future contract difference.
Thoughts?