Leveraged tokens are based on the ERC-20 token standards that allow the holders to leverage. As compared to traditional trading methods, users get a leveraged position with these tokens. It also offers the convenience of not requiring any margins whatsoever.
There are options for both fixed and variable leverages with the tokens. These assets rebalance themselves every day at 00:02:00 UTC or when there is a change of 10% in the spot price. Although the rule for rebalancing changes from one exchange to another.