Leverage multiplies exposure. With 10x leverage, $1,000 of margin controls a $10,000 position, so a 1% move in the underlying becomes a 10% move in the account. The multiplication is symmetrical and applies to losses exactly as it does to gains, which is the part that determines outcomes.
The binding constraint is the liquidation price. Higher leverage means less room between the entry and the level at which the position is closed out automatically, and at 20x or above that distance is small enough that routine volatility reaches it. Funding costs and fees also scale with position size rather than margin, so they consume a leveraged account faster than the headline rate suggests.
What leverage gets liquidated most easily?
The higher the multiple, the narrower the margin for error: at 25x, roughly a 4% adverse move exhausts the margin before fees. Most liquidation volume concentrates in the high-multiple tiers.
Last updated October 17, 2026