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Popular Education Topics
High-impact concepts explained clearly and concisely.
What Is Crypto Contract Trading? →
Understand how contract-based trading works and how it differs from spot markets.
What Is Crypto Margin Trading? →
Learn how traders borrow funds to amplify position size and trading power.
What Are COIN-M Futures? →
Explore coin-margined futures contracts and how they use crypto as collateral.
What Are USDT-M Futures? →
Learn how USDT-margined futures work and why they’re popular with stablecoin traders.
What Are Perpetual Futures Contracts? →
Understand the mechanics of perpetual swaps and how they differ from dated futures.
What Is A Margin Call? →
Discover what triggers margin calls and how to avoid forced liquidations.
What Is Over-Leveraging In Trading? →
Understand the dangers of excessive leverage and how it leads to rapid losses.
What Is Liquidation In Leverage Trading? →
Get to grips with liquidation thresholds and how they impact leveraged positions.
How Does Leverage Trading Affect Profit? →
See how leverage multiplies both gains and losses — and how to manage the tradeoff.
What is Leverage Trading?
Leverage trading involves using borrowed funds to increase your buying power across assets like crypto, forex, and stocks. To open a leveraged position, traders must provide a portion of the trade’s value as collateral, known as margin capital, which acts as the minimum investment required.
Leverage ratios vary by platform and asset class, often ranging from 2x to over 1000x. While higher leverage increases the potential return on each trade, it also dramatically raises the risk of liquidation if the market moves against your position.
On this website, we explain the full definition of leverage trading, how it works, when to use it, what the risks are, what it costs, and where it’s legal around the world.
Guides Preferred by Our Traders
Practical strategies and risk frameworks for traders ready to level up.
Best Leverage For A Small Account →
Find out how much leverage you should actually use with a limited balance.
Best Lot Size For Small Accounts →
Learn how to match your lot size to account size to avoid overexposure.
Cross Vs Isolated Margin →
Compare these margin types and choose the one with better risk control.
How Lot Size & Leverage Work Together →
See how lot size and leverage combine to shape profit, risk, and margin use.
Leverage Trading Fees & Costs Explained →
Break down all trading fees: funding, spreads, commissions, and hidden costs.
20 Leverage Trading Strategies →
Explore tactical setups for both high and low leverage environments.
15 Crypto Leverage Strategies →
Strategies tailored to crypto volatility, funding, and momentum setups.
Day Trading With Leverage →
A full walkthrough of intraday risk, entries, exits, and leverage rules.
Top 10 Risk Management Tips →
Apply the rules real traders use to manage position size, loss limits, and stress.
How Much Can You Make With Leverage?
Curious how much you could earn — or lose — with leverage? Here’s how position size and profit scale with different leverage levels.
Leverage: 25x
Market Gain: 2%
Profit: $500
Leverage: 25x
Market Gain: 12%
Profit: $3000
What Does Leverage Trading Mean?
Leverage trading gives you access to larger trade sizes than your account balance by using borrowed capital. This technique is common in crypto, forex, and stock markets — especially among traders aiming to maximize profits from small accounts.
For instance, with 1:10 leverage, a $100 deposit controls a $1,000 position. That extra buying power can produce outsized returns, but it also means losses can accumulate much faster when trades go against you.
Leverage ratios vary depending on the broker, asset, and regulatory environment. Some platforms offer up to 1:5000 leverage, but higher multipliers come with much greater liquidation risk.
While brokers may advertise leverage ratios up to 1000x, most experienced traders rarely go beyond 10x–20x, not because of lack of access, but because higher multipliers drastically reduce the margin for error and increase the chance of total account wipeout from small market moves.
How Does Leverage Trading Work?
Leverage Ratios Explained
The leverage ratio shows how much of your position is borrowed capital versus your own margin. A 10x ratio means you control 10x your investment — 1 part margin, 9 parts loan.
Leverage
The amount of borrowed funds your broker lends you to increase your buying power. Leverage allows you to open larger positions with less capital — for example, 10x leverage turns $100 into $1,000 of exposure. But the higher the leverage, the smaller the price move it takes to liquidate your account. Most risk-managed traders stay between 2x and 5x, especially in volatile crypto markets.
Margin
Your own money used as collateral. It’s what you risk in the trade — and can lose if the market turns. Margin requirements vary by platform, but 10x leverage means you must keep at least 10% of the trade value in your account. If your margin level drops too low, you’ll face a margin call or forced liquidation. Always set a stop-loss to protect your margin from sudden market moves.
| Account Size | 10x / 1:10 | 25x / 1:25 | 50x / 1:50 | 75x / 1:75 |
|---|---|---|---|---|
| $100 | $1,000 | $2,500 | $5,000 | $7,500 |
| $500 | $5,000 | $12,500 | $25,000 | $37,500 |
| $1,500 | $15,000 | $37,500 | $75,000 | $112,500 |
| $5,000 | $50,000 | $125,000 | $250,000 | $375,000 |
| $10,000 | $100,000 | $250,000 | $500,000 | $750,000 |
Multiply your account balance by the leverage ratio to calculate your position size.
Main Risks of Leverage Trading
Before using borrowed funds, it’s critical to understand the potential downsides of trading with leverage — from liquidation to overexposure and emotional risk-taking.