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Glossary Term

Leverage

Trading with borrowed funds to multiply exposure — and the speed at which accounts reach zero.

Leverage lets you control a position larger than your capital: 10× leverage turns $1,000 into $10,000 of exposure — and a 10% adverse move into total loss via liquidation. Crypto exchanges offer up to 100×+, which in an asset class where 10% daily moves are unremarkable is a coin-flip with extra steps.

Leverage is also systemic weather: cascading liquidations amplify crashes and short squeezes alike, visible in funding rates and open interest. The statistics are grim and consistent — the overwhelming majority of leveraged retail traders lose. If a strategy needs leverage to be interesting, the strategy is the problem.

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