What is Leverage?
A multiplier that lets you control a larger position than your deposited capital — amplifying both gains and losses.
Leverage lets you open a position worth more than your account balance by borrowing the difference from the exchange.
How it works:
With $1,000 and 10× leverage, you control a $10,000 position. A 1% move in your favor returns $100 (10% of your $1,000). A 1% move against you loses $100. At 10×, a 10% adverse move wipes out your entire margin.
Common leverage levels:
| Leverage | Max loss before liquidation (approx.) |
|---|---|
| 2× | ~50% |
| 5× | ~20% |
| 10× | ~10% |
| 20× | ~5% |
| 100× | ~1% |
Choosing the right leverage:
High leverage (50×, 100×) is almost never appropriate for discretionary traders — even a 1% stop gap can be wiped by normal volatility.