What is 100x leverage on Binance?

Leverage acts as a double-edged sword, amplifying both profits and losses. It can significantly boost your returns when the market moves in your favor, but it can also lead to significant losses if the market moves against you.

Transaction costs, such as fees and spreads, are also affected by leverage. With higher leverage, the impact of these costs on your overall position becomes more pronounced, potentially reducing your profitability.

Adjusting leverage on Binance can significantly impact your trading position and potential outcomes. By increasing leverage, traders gain access to a larger position size but also expose themselves to greater risks.

Let's illustrate this with an example. If you deposit 500 USDT into your Binance futures wallet and open a position with 100x leverage, your total exposure becomes 50,000 USDT (500 x 100). This means that even small market movements can result in significant gains or losses.

Higher leverage results in a lower maximum position limit, meaning that with each incremental increase in leverage, the maximum amount of assets you can trade decreases. Conversely, reducing leverage increases the maximum position size available.