Topic: Question on leverage (Read 152 times)
Depending on what kind of position security you use cross vs isolated 1 in the case of a long with 10 plaques for $ 10, the mardin call will be if the price drops by about 99%, this was achieved due to the fact that you use all $ 100 to save the long 100 position If you use isolation security, the margin call will come when the price it will drop to the bottom by 10%, but remember all these calculations work when using a margin of 10 x
So i am dabbling into trading again and i have a question about leverage. i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you? Or you do just lose your initial starting balance?. I am not sure how this works please clear this up for me thanks.
You'll lose that $100 that you deposited if you're having a high leverage and that's the way to be liquidated quickly but I think with 10, that's still manageable. If you're just coming back as you trade, I advice you to stay first in the spot.It's okay to try some pinch with leverage but don't start with a high one.
Have a test and see if you're for the leverage trading, otherwise no one will stop you to go in the spot trading.
when it comes to movement of price which is way far more riskier when you are dealing with spot.You dont know fully about the basics and stuffs which it would really be resulting into bad decisions
since you dont even know on how thing works.Try to familiarize different things and as for answering op's question then you arent paying anything but that 100 bucks of yours would be easily
be blown up or liquidated once the market do make out some opposition in terms of price swings.
So i am dabbling into trading again and i have a question about leverage. i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you? Or you do just lose your initial starting balance?. I am not sure how this works please clear this up for me thanks.
Depending on the type of margin you have used.If you used cross margin and opened a 10x leverage position using the $100 and there was some more money in your futures account. once the liquidation price is hit, you will lose all the money in your futures account as it would act as collateral
If you used isolated margin and opened a 10x leverage position using the $100 and there was some more money in your futures account. Once the liquidation price is hit, you will lose one the money you used to open the position ($100) as it would act as collateral
So i am dabbling into trading again and i have a question about leverage. i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you? Or you do just lose your initial starting balance?. I am not sure how this works please clear this up for me thanks.
it depends on the rules when it comes using leverage because there's are some platform that can really burn your account and some cannot.. So always remember to read the rule before using a leverage so that you are aware and you know how to manage it.. "the higher the leverage, the risk will be higher as well" i know someone already said this but this is the most important you always remember it. 
So i am dabbling into trading again and i have a question about leverage. i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you? Or you do just lose your initial starting balance?. I am not sure how this works please clear this up for me thanks.
You'll lose that $100 that you deposited if you're having a high leverage and that's the way to be liquidated quickly but I think with 10, that's still manageable. If you're just coming back as you trade, I advice you to stay first in the spot.It's okay to try some pinch with leverage but don't start with a high one.
Have a test and see if you're for the leverage trading, otherwise no one will stop you to go in the spot trading.
Only funds on your initial balance. I am only using Binance for this future trading, but I believe set up is all the same. Only funds on your future wallet will be used for your collateral just in any case. Also depends on what of margin if its cross or isolated. If isolated only set position will be blown out if loss but if cross all your funds are at stake depend on your margin or leverage. Also you cant set a higher leverage if your funds arent enough it will not be set or gonna ask you to add more fund.
If you mean you blow your account when you receive a "margin call" and do nothing against it, then all your balance on that exchange assuming you set the margin mode to "Isolated" will be completely lost, but you don't really have to pay for the negative balance due to the amount of leverage you used.
You will only lose the initial $100 in your account if, for instance, you utilized your $100 for a single margin trade that will serve as your collateral on that specific trade and the price goes above/below your liquidation point/price. That's the simplest explanation I can think of in terms of margin trading.
You will only lose the initial $100 in your account if, for instance, you utilized your $100 for a single margin trade that will serve as your collateral on that specific trade and the price goes above/below your liquidation point/price. That's the simplest explanation I can think of in terms of margin trading.
i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you?
- Don't use leverage if you are newbies in crypto market and don't know how difficult it is.
- Don't use leverage because you think it is an easy way to get rich. In fact, it is easiest way to get poorer.
- Don't use leverage (any leverage x2, x5, x10 or x100) if you don't know with a specific leverage, at what price you will be liquidated
No, you can't lose more than the initial starting balance aka margin. Just check the FAQ section of the exchange you use for trading and there is all the necessary information about stop-loss, margin call and stop-out price. My advice is to use max 10x leverage and don't take crazy risks with 500x or 1000x leveraged trades. After getting stop-out, the price will be liquidated automatically by system since no more margin left to support your trade position.
P.S: In rare cases, your balance can go negative but you are not supposed to cover the negative balance depending on the broker/exchange T&C. Once I lost more than $800 in a quick spike and the price slippery causes a few points above my stop loss point but the exchange/broker has agreed to reset the negative balance.
P.S: In rare cases, your balance can go negative but you are not supposed to cover the negative balance depending on the broker/exchange T&C. Once I lost more than $800 in a quick spike and the price slippery causes a few points above my stop loss point but the exchange/broker has agreed to reset the negative balance.
The higher the leverage you used, the higher the risk. If bitcoin is at $25000 and you used 10x leverage to open a long position, the liquidation price would be around $22500, if you used 1x leverage, the liquidation price would be below $1000, that is if bitcoin get below $1000. Because of the high risk, it is done in a way the exchange would gain from trading fee and the loaners would gain from the high liquidation price, only you will not be favoured, but you have nothing to pay after you lose the whole $100.
So i am dabbling into trading again and i have a question about leverage. i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you? Or you do just lose your initial starting balance?. I am not sure how this works please clear this up for me thanks.
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