⚡ Crypto Leverage: Higher Exposure Means Higher Risk
Leverage allows traders to control a position larger than the margin they provide.
For example, with 10x leverage, a $100 margin can provide exposure to a $1,000 position, before fees and other requirements.
This does not mean you have earned $1,000 or that your potential profit is guaranteed.
A 1% adverse price movement on that position represents approximately $10 in losses before fees, funding, and other costs.
That is 10% of the original $100 margin.
Larger adverse movements can lead to liquidation, depending on the exchange s rules and the position s margin requirements.
Beginners should understand these risks before using futures trading.
Never assume that higher leverage is the same as higher trading skill.
#Binance #FuturesTrading #Leverage #CryptoRisk
Leverage allows traders to control a position larger than the margin they provide.
For example, with 10x leverage, a $100 margin can provide exposure to a $1,000 position, before fees and other requirements.
This does not mean you have earned $1,000 or that your potential profit is guaranteed.
A 1% adverse price movement on that position represents approximately $10 in losses before fees, funding, and other costs.
That is 10% of the original $100 margin.
Larger adverse movements can lead to liquidation, depending on the exchange s rules and the position s margin requirements.
Beginners should understand these risks before using futures trading.
Never assume that higher leverage is the same as higher trading skill.
#Binance #FuturesTrading #Leverage #CryptoRisk