Leverage?

I have just started going through the school so I prolly haven’t gotten to this part yet, but could someone help me understand leverage. I know if you have 100:1 you can control a 100k trade with 1k of capitol. What does this mean for payout though? I assume it means that if the value goes up 2k you get 2 grand but you cannot lose more than the 1k you put up. Is this wrong (it feels wrong)? How can you make money off of a 100k trade if you only put up 1k? It feels like imaginary money to me.