As long as you are a suitable investor (can trade with leverage on stocks), you are legally allowed to trade bonds with leverage.
Leverage is using borrowed money to increase your investment buying power.
Where an investor with $10,000 that does not use leverage can buy $10,000 worth of bonds, an investor who uses leverage can buy $20,000 worth of bonds or more, with that same $10,000.
People use leverage to try an increase the profit potential of their investments. Leverage is however a double edged sword: Just as additional buying power that comes with leverage increases your profit potential, it increases your loss potential by the same amount.
When you increase your buying power with leverage, the money you use to do so comes from your broker. As with any other type of loan, your broker charges you interest for that loan, which for most brokers is currently around 7%.
The interest that you have to pay on the borrowed money you are using to leverage your bond investment is generally going to be higher than you are earning from the interest the bond is paying you. Because of this leverage is only used by bond traders who are looking to take advantage of short term movements in the price of a bond.
Most brokers do not offer the ability to trade bonds using leverage. The two exceptions that we know of are Interactive brokers and iTB securities. There is no standard in terms of the amount of leverage you can get when trading bonds, however generally the more liquid the security you are trading the more leverage available.
iTB securities for example offers 10 to 1 leverage when trading Treasuries, meaning that you can control up to $10,000 worth of securities per $1000 of your own money in your account. For corporate bonds they offer 5 to 1 leverage, and no leverage is offered on Municipal bonds (because they are the least liquid).