Margin is based on investments. If you invest 1 BTC at 5x margin, you're taking the same risk as if you had 5 BTC invested. To illustrate:
(No margin)
1 BTC out of 10 BTC = 10%. Player wins 50% of the bankroll, you lose 0.5 BTC and have 0.5 BTC left.
(5x margin)
1 BTC x5 out of 10 BTC = 5/10 = 50%. Player wins 20% of the bankroll. 20% of 5 BTC is 1 BTC. You lose 1 BTC so you now have 0.
At the same time, you also earn profit as if you had 5 invested. Higher risk, higher reward.
Thank you ranlo. That was a simple, short and sweet explanation. I do not have such high risk appetite. I shall stick with the default 1x margin.