Contract leverage, also called leveraged trading, allows traders to control larger positions with a smaller amount of capital. It is widely used in cryptocurrency futures, perpetual contracts, and CFDs.
In leveraged trading, you put up a portion of your funds as margin to open a position, while the exchange effectively lends you the rest. This amplifies both potential profits and losses.
Example:
Using 1,000 USDT with 10× leverage lets you control a 10,000 USDT position.
If the price moves favorably, your gains are multiplied. If it moves against you, losses are also magnified.
Margin
Initial Margin: Minimum capital needed to open a position.
Maintenance Margin: Minimum required to keep a position open and avoid liquidation.
Liquidation
Occurs when losses reduce your equity below the maintenance margin.
Higher leverage increases the risk of liquidation.
Position Modes
Cross Margin: Uses the entire account balance as margin. Risk is shared across positions.
Isolated Margin: Each position has separate margin. Only that position is affected if liquidated.
Leverage amplifies both profits and losses.
Beginners should start with low leverage (1–5×).
Always set stop-loss/take-profit levels.
Keep positions proportional to your account equity to manage risk.
