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Blockchain & Crypto vocabulary · Exchanges & Trading

Leverage

Meaning in blockchain & crypto, with examples

/ˈlev.ər.ɪdʒ/nounCommon term

In blockchain & crypto, leverage means: The use of borrowed funds to open a trading position larger than your own money. It is shown as a ratio such as 10x and makes both gains and losses bigger.

In Turkish: kaldıraç, kaldıraçlı işlem

How it is used

Common in futures and margin trading: use leverage, trade with 5x leverage, high leverage, leveraged position. With 10x leverage, a 10% price move against you can wipe out your margin and lead to liquidation. Several regulators limit or ban leveraged crypto products for retail customers.

Example sentences

  1. He opened a position with 20x leverage, and a small drop was enough to close it.

  2. Our risk team set the maximum leverage for new users at 3x.

Common collocations

  • use leverage
  • high leverage
  • leveraged position
  • 10x leverage
  • reduce leverage
  • liquidationThe forced closing of a leveraged position or a loan when the value of the collateral falls below a required level, so that the lender or the exchange does not lose money.
  • collateralAssets that a borrower locks up as security for a loan or a leveraged position. If the debt is not repaid or the collateral loses value, it can be sold to cover the loss.
  • volatilityHow much and how quickly a price moves up and down. Crypto prices are known for high volatility, with moves of 10 percent or more in a single day.
  • spot tradingBuying and selling crypto at the current market price for immediate settlement, so that the buyer really owns the coins, unlike trading futures or other derivatives.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Exchanges & Trading

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