Cryptocurrency Lexicon Letter L

Leverage

The use of borrowed capital to amplify trading position size relative to deposited margin.

Leverage glossary illustration
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In-Depth Explanation

Leverage multiplies both potential profits and prospective losses. 10x leverage means a 10% adverse price move causes 100% loss of initial margin.

Practical Market Example

Real-World Application

Using $1,000 margin with 5x leverage to control a $5,000 position.

Related Calculators

Related Educational Guides

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