What Is Leverage in Crypto Trading?
Leverage explained simply: how 10× or 100× works, what it does to your liquidation price, and how to use it without blowing up.
What leverage does
Leverage lets you control a position larger than your margin. At 10× a $100 margin controls $1,000 of exposure, so a 1% move becomes a 10% swing on your margin — gains and losses are both magnified.
The catch: liquidation
The flip side is your liquidation price. The higher the leverage, the smaller the move that wipes you out — roughly 1% at 100×, 2% at 50×, 10% at 10×. Magnified upside comes with magnified fragility.
Using it sensibly
Leverage is a tool for capital efficiency, not a number to max out. Size by risk, keep the liquidation price beyond the noise, and remember funding costs scale with position size, not margin.
FAQ
What does 10x leverage mean?
10× means your position is ten times your margin: $100 controls $1,000, so a 1% price move equals a 10% move on your margin — in both directions.
Is high leverage bad?
High leverage is not inherently bad, but it puts your liquidation price very close to entry. Most blow-ups come from oversizing at high leverage, not from leverage itself.
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