What is leverage in trading?

Leverage in trading enables you to open a position worth much more than the money you deposit. For example, you might be able to multiply your position size by 5, 10, 20 or even 33x the amount of your initial outlay.

What is a 10x leverage?

The amount of leverage is described as a ratio — such as 1:5 (5x), 1:10 (10x), or 1:20 (20x) — and shows how many times your initial capital is multiplied. For example, if you have $100 in your exchange account but want to open a position worth $1,000 in bitcoin (BTC), a 10x leverage will give your $100 the same buying power as $1,000.

Can you borrow money and start trading with leverage?

Before you can borrow funds and start trading with leverage, you need to deposit funds into your trading account. The initial capital you provide is known as collateral. The collateral required depends on the leverage you use and the total value of the position you want to open (known as margin).

What are the best exchanges for leverage trading?

Another great exchange for leverage trading is FTX. As one of the newer exchanges on the block, they have quickly risen to become a major player. In the Asian demographic, OKX (formerly known as OKEx) is dominant. The second largest exchange globally by volume has fees comparable to Binance.