Glossary
Leverage
Borrowed capital used to amplify a position's size relative to the trader's actual collateral — magnifies both gains and losses, with liquidation risk.
Leverage multiplies a position's notional size against the trader's posted collateral. 10x leverage means a $1,000 collateral position controls $10,000 of notional exposure — a 1% adverse move wipes 10% of the trader's equity.
Crypto perpetuals routinely offer 50–100x leverage; spot lending typically caps leverage at 2–5x by the collateralization ratio. The trader's account is liquidated automatically once the collateral falls below a maintenance threshold, returning the borrowed funds to the lender.