Derivatives & Risk

What is leverage in crypto trading and why is it risky?

Leverage in crypto trading is the use of borrowed funds to control a position larger than your own capital, expressed as a multiple such as 5x or 10x. It magnifies both gains and losses relative to the capital you actually posted. For example, at 10x leverage a 10 percent price move against you can wipe out your entire margin and trigger liquidation. The risk is that small, ordinary price swings become large losses, and positions can be closed automatically before the market recovers. This is why leveraged trading demands careful position sizing and risk awareness.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.