Leverage Explained — What 10× and 100× Really Mean
Leverage is one of the biggest factors determining both profits and losses in crypto futures. Rather than assuming that 100× means earning 100 times more, let us look at what it means and why high leverage is dangerous, using numbers.
What Is Leverage?
Leverage is the multiplier that lets you hold a position larger than your margin. Using 10× leverage with KRW 1 million means managing a KRW 10 million position. Both percentage gains and percentage losses are amplified by that multiplier.
If the price rises 1%: 1× = +KRW 10,000 / 10× = +KRW 100,000 / 100× = +KRW 1 million.
If the price falls 1%: at 100×, the loss is KRW 1 million → all margin lost (liquidation).
In other words, at 100×, just a 1% adverse move ends the position.
The Relationship Between Leverage and Liquidation
The higher your leverage, the closer your liquidation price is to your entry price. This is why brief volatility can liquidate you even if you get the overall direction right.
| Leverage | Approximate Room Before Liquidation (Adverse Move) |
|---|---|
| 2× | About −50% |
| 5× | About −20% |
| 10× | About −10% |
| 100× | About −1% |
※ Fees and maintenance margin make the actual liquidation price slightly closer.
What Leverage Level Is Appropriate?
- The apparent profit potential of high leverage is an illusion. In practice, a single bout of volatility can liquidate you, making long-term survival difficult.
- Beginners are more likely to survive by starting at 2–5× or lower, leaving plenty of room before liquidation.
- What matters is first deciding how much you can afford to lose on a trade (risk), rather than the multiplier itself.
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