Crypto leverage calculator

Worked example

Say you post $500 of margin on a 10x long. The exchange lets you trade ten times that, so you control a $5,000 position: 2.5 coins at $2,000 each.

The coin rises 5% to $2,100. Each coin gains $100, so the position gains 2.5 × $100 = $250. That is half your $500 again. At 10x, a 5% move in the price is a 50% move in your margin.

It works the same way down. A 5% drop to $1,900 loses $250, half the margin. At $1,809.05, 9.55% below the entry, the loss has eaten the margin and the exchange closes the position. Type an exit below that and the calculator shows the whole $500 gone, because the trade never gets there.

The formula

Position value = margin × leverage. Position size = value ÷ entry. Profit or loss = size × (exit − entry), turned around for a short. Return on margin = profit or loss ÷ margin.

The liquidation price uses the isolated-margin formula from our liquidation price calculator. Leverage multiplies the return and shrinks the room in the same step. With a 0.5% maintenance rate, a 10x long is closed after a fall of 9.55%, a 20x long after 4.52% and a 50x long after 1.51%.

Questions and answers

How does leverage work in crypto?

You post margin and the exchange lets you trade a position several times bigger. At 10x, $500 of margin controls a $5,000 position, so every 1% move in the price is 10% of your margin, up or down.

How do I calculate leverage?

Divide the position value by the margin. A $5,000 position on $500 of margin is 10x. To go the other way, multiply the margin by the leverage to get the position.

How much can I lose with leverage?

With isolated margin, the margin you posted for that position. Liquidation closes the trade before the loss goes past it, apart from fees and very fast markets. With cross margin the rest of your balance stands behind the position as well.

Does higher leverage mean more profit?

Only on the same margin, and only in the good direction. On $500, 20x makes twice what 10x makes when the price rises, and it is liquidated after a fall of 4.52% instead of 9.55%.

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