> For the complete documentation index, see [llms.txt](https://docs.chainbitx.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.chainbitx.com/help-center/eng/readme/trading-guide/basics-of-contract-trading/introduction-to-contract-leverage.md).

# Introduction to Contract Leverage

**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.

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#### Key Concepts

1. **Margin**
   * **Initial Margin:** Minimum capital needed to open a position.
   * **Maintenance Margin:** Minimum required to keep a position open and avoid liquidation.
2. **Liquidation**
   * Occurs when losses reduce your equity below the maintenance margin.
   * Higher leverage increases the risk of liquidation.
3. **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.

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#### Risks and Tips

* 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.