Trading

Leverage and Margin

2024-06-22 06:020155

What is Leverage?

In Futures trading, leverage means amplifying a position many times for a bigger gain from 2x to a maximum of 125x depending on trading pair. it means that a trader can open a new position of 1 BTC in price of $30000, with only $240 as initial funds under 125x leverage ratio. However, a higher leverage also poses a bigger risk when the market does not favour your position.

Definition of Margin

When a position is opened, margin is required as a collateral to sustain the position, or to cover the losses. A margin depends on the availability of assets in your Futures account, yet it will be limited by the position size that you wish to trade.

Relationship between Leverage and Margin

The higher of leverage in a position, the lesser margin is required. Some traders do not need to invest with much assets in a higher leverage as traders can utilise their funds to open more position size in a single trade. Despite this, higher leverage may not amplify the profits/losses from a larger position size.

How to adjust leverage in Futures Trading?

1. Web version: Click the [leverage] on top right of Futures page.

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2. Mobile app version: Click the [leverage] on top of Futures page.

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Position Tiers

In the list of Position Tiers, traders are able to check the maximum leverage in each trading pair. Each trading pair has different maximum leverage, which is used to determine your positions, pending orders, and the number of new orders placed at the time of opening.

Additional note: The amount of position size that can be opened is limited by the leverage, available funds, and maximum positions, depending on which trading pair you are going to trade.