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  1. Home
  2. /Glossary
  3. /Leverage
Back to Glossary
trading

Leverage

Borrowing funds to increase your trading position beyond what your capital alone would allow.

Definition

Borrowing funds to increase your trading position beyond what your capital alone would allow. Trading with 10x leverage means a 1% price move gives you a 10% gain or loss. While it amplifies profits, it also amplifies losses and can lead to liquidation if the market moves against you.

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Related Terms

Margin

Borrowed money used to increase trading position size.

Liquidation

When a borrower's collateral is forcibly sold because their position became too risky.

Perpetual Swap

A derivative contract similar to futures but with no expiration date.

Accumulation Phase

A period when smart money quietly buys up an asset before a major price move.

Annualized Return

The average yearly return on an investment, calculated to account for compounding.

Arbitrage

Profiting from price differences of the same asset across different markets.

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