Leverage and Margin are 2 core concepts in Contract Trading and understanding them will help users to better manage on the amount of investment and leverage to trade. These are very important starting points for professional investors.
What is Leverage and Margin?
In contract trading, users can invest a small amount of money as margin for collateral and obtain up to 150 times of contract value for trading.
Da Bing only have a total asset of 5000 USDT and the current BTC price is at 10000 BTC. In Spot Trading, the user can only purchase 0.5 BTC to obtain income. But in Contract Trading, the user only need to use 1000 USDT as margin and choose 20x leverage to realize a position value of 4 BTC.
How to adjust leverage?
Please refer below screenshot. Click the leverage modification button located on the right-hand side of the Contract Trading page and a pop-up window will appear for you to adjust your leverage.
BiKi supports up to 150x leverage for various tokens. You can select/adjust a suitable leverage multiple and set the corresponding margin for your contract position in the contract trading page.
1. Higher leverage means lesser margin will be used but higher risk of forced liquidation.
2. When choosing cross margin or choosing to increase/decrease leverage under isolated margin, your liquidation price and real-time leverage will change. Please do take note of the liquidation price to manage your position in a timely manner.
3. Reasonable leverage control is the most effective measure to reduce risks.
BiKi recommends that users should spend time to learn and understand the basic logic and principles of contracts. An objective understanding of the investment product will help you become a professional investor, which is an important starting point for your professionalism and risk tolerance.
Editor: BiKi Trading Academy
Update: Contract Trading Open Class Team