Leverage

The leverage effect allows traders to increase their buying power.

Let's assume you want to buy 1 BTC because you think the price will increase. Now, assuming Bitcoin is at a value of $50,000, you can generate up to $50,000 in buying power with $5,000 and 10x leverage by hedging a position with margin - a collateral that is worth less than the total position size.

Example:

You can open a BTC long position worth 1000 USD with a margin of 100 USDT. Your leverage is 10x, which corresponds to a margin ratio of 10%. When the margin ratio drops to 2.5%, your position will be fully liquidated. Example

Using leverage exposes your money to liquidation at any time. Make sure you understand the risks of leveraged trading before proceeding.