Leverage lets you control more notional than cash alone by posting margin as collateral. Exchange UIs show ratios like 5× or 20×; caps depend on product, jurisdiction, and tier. Leverage is a ceiling on size given equity—not a score to maximize.
Required margin vs free margin
Required margin is collateral locked for open positions. Free margin is what remains for new trades or drawdown. When free margin shrinks toward zero, liquidation or auto-deleveraging risk rises—rules differ for isolated vs cross margin.
Margin is not the same as risk
A small margin ticket can still represent a large notional swing. A violent move against you can lose faster than intuition suggests.
Use the margin calculator to compare margin under different leverage and size assumptions (USD-notional model; confirm on your venue).
Margin as a risk gate, not a game score
High leverage compresses the distance between a normal drawdown and a liquidation event. Treat leverage caps as safety rails from the exchange, not a target to max out.
Equity swings change everything intraday
Floating P&L moves equity while used margin may stay fixed until prices move enough to change requirements. Watching free margin alongside open risk is basic hygiene—especially when several alts move together.
- Set alerts for margin ratio if your venue supports them.
- Precompute worst-case margin stacks before adding correlated bets.
- Understand isolated vs cross rules before stacking.
Closing the loop with calculators
Use margin previews when you change leverage tiers, add a volatile long-tail coin, or roll onto a new account type.