Leverage & Margin,
explained properly.
Six short lessons, three calculators you can actually play with, and a straight answer on which exchanges let you do this where you live. No jargon for the sake of it. Nothing here places an order.
Education only. Not financial advice and not a broker. Leverage can lose more than your deposit.
Leverage does not make a bad trade good. It makes every trade bigger — the winners and the losers equally. Most people who lose an account to leverage did not get unlucky. They used a setting they did not understand on money they could not afford to lose.
If you finish this guide and still cannot say out loud what your liquidation price is before you click, you are not ready. That is a normal place to be.
Six lessons. One idea each.
Read in order the first time. Tap a lesson to open it, answer the question, mark it done.
Spot — you buy the coin and own it. Price up 10%, your coin is worth about 10% more. Nobody can close you out. You can still lose if it falls, but only what you put in.
Spot margin — you borrow cash or coins to buy more than you can afford, and you pay interest for the loan. The loan is the risk. Fail to cover it and the exchange sells you out.
Perpetual futures — you post collateral and get a contract that tracks the coin. You never own the coin. It has no expiry date, and a payment called funding keeps it close to the real price.
In one lineSpot owns. Margin borrows. A perpetual just tracks.
A perpetual future gives you…
You never take delivery. You post collateral and hold a contract that follows the price.
You have $100. At 1× you buy $100 of coin and a 10% rise makes you about $10.
At 5× that same $100 controls $500. A 10% rise makes about $50. A 10% fall loses about $50. A 20% fall wipes the $100 out.
The extra $400 was never money in your account. It was exposure. Your downside grew by exactly as much as your upside did.
In one linePosition size = your cash × leverage. Nothing was deposited.
You post $100 at 10×. Price moves 10% against you. Ignoring fees?
10× means a 10% adverse move equals 100% of your margin. The venue closes you slightly before that.
Initial margin is the deposit needed to open. Maintenance margin is the smaller amount you must still have for it to stay open.
Isolated margin risks only the cash you assigned to that one trade. If it fails, that slice is gone and the rest of your wallet is untouched. The cost is a closer liquidation.
Cross margin lets the trade draw on your whole wallet. Liquidation sits further away — but one bad trade can spend everything, not just a slice.
In one lineIsolated protects the wallet. Cross protects the trade. Pick on purpose.
You isolate $100 out of a $1,000 account and the trade is liquidated.
That is the entire point of isolated — the damage is capped at the slice you assigned.
Long means you profit if price goes up. Short means you profit if it goes down. On a perpetual you do not need to own the coin to take either side.
Beginners get short backwards because shopping only ever trains "buy low". On a short, a falling chart is a winning chart.
Both sides can be liquidated. A short has no natural ceiling on how far price can run against it, which is why size matters even more on that side.
In one lineDirection is a choice. Liquidation applies to both choices.
You are short and the price falls.
A short profits as price falls. Perpetuals have no expiry to wait for.
When your margin falls below the maintenance level, the venue closes the position for you. You do not choose the price you get.
The rough move that wipes isolated margin is 100 ÷ leverage, in percent. 10× is about a 10% move. 5× about 20%. 2× about 50%. Fees pull that line slightly closer.
Most venues liquidate on a smoothed "mark" price built from several exchanges, not the last trade printed on your chart. A scary wick on the chart does not always liquidate you — and sometimes a calm-looking chart does.
In one lineA stop is your decision. Liquidation is the venue's. Never use liquidation as your stop.
Roughly what adverse move wipes isolated margin at 20×?
100 ÷ 20 = 5. At 20× a 5% move against you is the whole deposit.
Funding is not an exchange fee. It is a payment passed between longs and shorts to keep the contract near the spot price.
If the contract trades above spot, longs usually pay shorts. Below spot, shorts usually pay longs. Many venues settle roughly every 8 hours.
It is charged on the whole position, not on your margin. 0.03% on a $20,000 position is $6 per interval — about $18 a day, every day you hold.
In one lineFunding is rent on the position. Held long enough, it quietly eats the trade.
Funding is +0.03% and you are long $20,000. Roughly what do you pay this interval?
0.03% of $20,000 = $6. It is charged on the position, not your margin.
The words, without the costume 12 terms
- Margin
- The cash you post so a leveraged trade can exist. A deposit, not the size of the bet.
- Notional
- The full size of the position in dollars. $100 at 5× is a $500 notional.
- Mark price
- A smoothed price from several exchanges. This is usually what liquidates you.
- Last price
- The most recent trade on that book. Not necessarily the price that liquidates you.
- Isolated margin
- Only the cash assigned to that trade is at risk.
- Cross margin
- The whole wallet backs the trade. Further from liquidation, more to lose.
- Maintenance margin
- The minimum you must still hold for the position to stay open.
- Funding rate
- Periodic payment between longs and shorts on a perpetual. Not a fee to the venue.
- Liquidation
- The venue closing your trade because margin ran too low. You do not pick the fill.
- Slippage
- The gap between the price you clicked and the price you got.
- Reduce-only
- A switch so an order can only shrink a position, never open a new one.
- Stop order
- Your own exit at a level you chose. A request, not a guaranteed price.
Move the numbers until it clicks.
Round figures on purpose. Nothing connects to an exchange and nothing is sent anywhere.
Isolated margin, 0.5% maintenance, fees ignored. Real venues differ slightly — always read the liquidation price on your own ticket.
This is the order the desk works in: decide what you can lose, then let the stop and the maths hand you the size. The leverage number is an output, never an input.
Funding settles roughly every 8 hours on most venues. A negative rate means you are paid instead of charged.
Where you can actually do this.
The same product has different names, different rules and different doors depending on where you live.
The order ticket, field by field
Generic on purpose — every venue styles this differently and restyles it again next quarter. All eight controls are on all of them. Tap any field to find out what it does. Nothing here is connected to anything.
BTC-USD PERP is a perpetual on bitcoin, priced in dollars. You never receive bitcoin. Check this line first — on most venues the spot ticket and the perps ticket look almost identical, and people open the wrong one.
Isolated risks only the cash assigned to this trade. Cross lets it draw on the whole wallet. Set it before you open — many venues will not let you change it on a live position.
The number most people get wrong. It is a ceiling the venue allows, not a suggestion. Watch the liquidation price move as you drag it — that is the only honest readout of what you just chose.
Market fills right now at whatever price is there, which in a fast move is worse than the one on screen. Limit fills only at your price or better, and may never fill at all. Beginners should default to limit.
Greyed out on a market order, because you are not choosing the price — you are accepting whatever the book gives you. That gap is called slippage.
The trap. Many tickets show size as a percentage of your balance, so 100% looks like a full allocation rather than every dollar you own at the leverage above. Some show coin quantity, some show dollar value. Read the unit before you drag.
The single number to read before you confirm. If you cannot see it on your ticket, find it. If the move between here and your entry looks like an ordinary day on the chart, the size is wrong.
A safety switch: the order can only shrink a position, never open one. Tick it on every exit order and a fat-fingered stop can never flip you into a brand new trade in the opposite direction.
Drag leverage or size and watch the liquidation price. That is the whole lesson.
Kraken Pro
US + international- Spot margin
- Yes. Spot margin is available to eligible US clients.
- Futures / perps
- Yes. Perpetual futures for eligible US clients, run through Bitnomial, a CFTC-licensed venue.
US access depends on eligibility checks and your state. Kraken also runs a separate international derivatives product.
Coinbase
US regulated- Spot margin
- No retail spot margin in the US. Leverage comes through regulated futures instead.
- Futures / perps
- Yes. CFTC-regulated futures including small "nano" contracts, plus US perpetual-style futures.
You count contracts rather than typing any size. A nano bitcoin contract is 0.01 BTC, so five of them is 0.05 BTC of exposure.
Binance.US
US · spot only- Spot margin
- No. Binance.US is a spot exchange.
- Futures / perps
- No futures or perpetuals.
A different company from Binance.com. Do not follow a Binance.com futures tutorial on a Binance.US account — the product is not there. Supported states vary.
Binance.com
Not for US persons- Spot margin
- Yes. Spot margin with hourly interest on what you borrow.
- Futures / perps
- Yes. USDⓈ-M (stablecoin margined) and COIN-M (coin margined) perpetuals. Funding roughly every 8 hours.
The leverage slider has reached 100×+ on some bitcoin contracts. That is a product ceiling, not a setting to use. Liquidation runs on Mark price, not Last price.
Bybit
Not for US persons- Spot margin
- Margin through its unified trading account.
- Futures / perps
- Yes. USDT and inverse perpetuals, isolated or cross.
Popular for its order ticket and testnet. Check Bybit's own restricted-country list before you sign up.
Bitget
Not for US persons- Spot margin
- Margin through its futures account.
- Futures / perps
- Yes. USDT-M and coin-margined perpetual and delivery futures.
Known for copy trading, which is a different risk: you inherit someone else's size and stops.
OKX
Check your region- Spot margin
- Spot margin on the global exchange.
- Futures / perps
- Yes. Perpetual swaps, USDT and coin margined.
OKX runs a separate US-facing entity with a narrower product list than the global exchange. Confirm which one your account is on before following any tutorial.
BingX
Not for US persons- Spot margin
- Margin inside the futures account.
- Futures / perps
- Yes. Standard and perpetual futures, plus copy trading.
Heavily promoted copy trading. Copying a trader does not copy their risk tolerance or their account size.
How accounts actually go to zero.
Rarely a mystery wick. Usually a setting that was already wrong before the wick arrived.
Liquidation is the venue protecting itself, not you protecting yourself. By the time it fires, the whole margin is gone.
The slider is a ceiling, not a recommendation. Decide the loss you can take, then let the maths give you the size.
One bad altcoin position quietly spending a wallet that was mostly supposed to be long-term holdings.
Adding size to be "less wrong" moves your liquidation closer while you are already losing. It is the single most expensive habit in leverage.
Five long altcoins is not five trades. In a sell-off it is one trade at five times the size.
A small percentage on the full position, several times a day, compounds into a real number while you wait to be right.
- Risk a fixed small slice per trade — a single number you decide once, in advance, and do not move when you feel confident.
- The stop goes in before the entry — not after, not "when I see how it goes".
- Obey the leverage cap you set yourself — not the one the slider allows.
- No averaging down unless a plan you wrote beforehand says to.
- Correlated pairs are one risk unit, not several.
- Size to survive a losing streak, because you will have one.
- Open the account and switch margin or futures on. Do not fund it heavily.
- Find demo or testnet mode. Place twenty practice trades: open, set a stop, take partial profit, close.
- Read your own liquidation price on the ticket, every single time, before you confirm.
- First ten live trades at the smallest size the exchange allows. The goal is proving the process, not making money.
- Only then think about size — and keep the leverage where it was.
Education only. Not financial advice, not a broker, not a solicitation. Crypto leverage can lose more than your deposit. Availability, caps and fees differ by venue and by where you live — verify everything on the exchange's own site before you trade.