All terms
Borrowing to increase position size, which multiplies both gains and losses.
Ten times leverage means a 10 percent move against you wipes out your entire deposit. The exchange closes the position automatically, which is called liquidation, and you keep nothing.
Leverage is the single fastest way for beginners to lose everything. Most people who use it lose money, and the ones who do not treat it as a professional tool with strict rules.
On 20x leverage, a 5 percent move liquidates you. Crypto moves 5 percent regularly, including while you sleep.
That low leverage is safe. Crypto routinely moves twenty percent in a day, so five times leverage is enough to be liquidated in an ordinary session. The multiple is not the risk; the distance to your liquidation price is.
Common questions
How much leverage is safe?
What is the difference between 10x leverage and investing ten times more?
Where this comes up on the site
The guides that actually use this word, rather than a list of everything we have written.
Where to go next
More trading terms
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