🚨 🔥 Attention, leverage in trading means borrowing money to increase the size of your position — this way you can trade with more than you actually own.
Let's understand with a quick example:
Let's say you have $100 and use 10x leverage.
Now, you can open a trade worth $1,000 (your $100 × 10).
Why traders use leverage:
• To maximize potential profit with a small amount of capital.
• To take larger positions in the market.
But there's a catch:
• Higher leverage = higher risk.
If the market moves just a little against you, you can quickly lose all your money — this is called liquidation.
In crypto (like Binance):
• Leverage can range from 2x to 125x (depending on the token and the platform).
• It is popular in futures trading.
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A catchy way to remember:
Leverage is like trading on steroids — quick gains or quick pain.