The cryptocurrency market is expanding, and crypto trading services are not far behind. To satisfy traders’ needs, crypto exchanges have come up with more and more convenient trading tools and financial instruments, creating competition in the market. So there are many crypto platforms, beckoning new clients with a variety of trading tools and low fees. Among them, the largest exchange in Europe – WhiteBIT, officially working and complying with the KYC and AML requirements. The platform offers a full set of trading tools, including the most common:
- spot;
- futures;
- margin and leverage;
- p2p;
- codes;
- DEX.
We would like to talk about crypto trade leverage.
What is Leverage?
It is the name for borrowed funds a trader takes from the crypto platform to enter the market with a more profitable position based on his vision of the future asset’s price movement. For example, the trader believes the DASH cryptocurrency price will grow in the future, so one wants to buy this asset as long as its rate is relatively low and generate income from selling DASH when it reaches the moon. However, the trader has only $100 worth of Dash coins, but he wishes to enter the market with a stronger position, for example, to buy DASH for $1000. For that purpose, he borrows funds from the exchange. Every platform offers different sizes of leverage. WhiteBIT allows trading crypto leverage up to X20. The bigger leverage you take, the more risk you take. In the case DASH does not grow, the platform will impose penalties on the trader, and his position will be liquidated, so be cautious and aware of the risks.
How can I Use Leverage For Crypto?
Suppose you want to enter the market having only $100 (your initial deposit called collateral) in the DASH cryptocurrency equivalent. You take X10 leverage and open the position for $1000. To open the position, you need to register an account, pass KYC, pick the leverage, deposit the initial amount and open the position.
To learn more about this type of trading, read the WhiteBIT blog.
