Leverage and liquidation, explained simply

Leverage means trading with borrowed money on top of your own. With $100 and 10× leverage, you control $1,000 of a coin: your $100 plus $900 lent by the platform.

Your money (collateral):   $100   ← yours, at risk
Borrowed from platform:    $900   ← a loan
Total you control:       $1,000   ← 10× leverage

The $100 is yours. It is called collateral or margin. The platform lends the rest, here $900, and it all goes into the coin together.

Losses come out of your $100 first. The platform makes sure its $900 is never touched; that is what liquidation is for.

You pick it. Leveraged exchanges show a slider when you open a trade, often from 1× up to 100× or more. 10× is just a round example. The higher you go, the closer the liquidation price sits to today’s price.

Rule of thumb: you are liquidated after a drop of about 100% ÷ leverage.

If the price moves against you far enough that your losses use up your own money, the platform sells your position by force to get its loan back. That forced sale is the liquidation.

"Liquidation at $X" is the price where that happens. With 10× leverage on a coin at $2,250, it sits near $2,025, about 10% lower.

Same example: $100 of yours, 10× leverage, $1,000 of the coin.

1. 1It closes a little before −10%. Platforms keep a safety margin and charge a fee, so it usually happens around −9 to −9.5%.
2. 2You cannot wait it out. If the price bounces back the next day, it no longer helps: your position was already sold at the bottom.
3. 3You usually cannot lose more than your $100. In a very sudden crash the sale can land below what you owe; crypto exchanges usually cover that from an insurance fund, but some brokers ask you to pay the difference.

You do use all of it: the borrowed $900 buys coins together with your $100. What you cannot do is lose it. The gain is that the price move applies to the whole $1,000, while you only put in $100.

1. 1The coin rises 10%, so your $1,000 position is worth $1,100.
2. 2You close it: the coins are sold and the $900 loan is repaid.
3. 3You keep $200: your $100 back plus $100 profit.

The catch: losses are multiplied exactly the same way. At 10×, −5% costs half your money and −10% costs all of it.

• It earns fees: a trading fee on the full $1,000, not just your $100, plus a small fee for every hour or day you hold (called funding or interest).
• Its money is safe: your $100 takes the losses first, and liquidation sells you out before the $900 is touched.

Everyday comparison: a house with a mortgage. You put ₱1M down and the bank lends ₱9M for a ₱10M house. If it rises 10% you gain ₱1M on your ₱1M (+100%); if it falls 10%, your ₱1M is gone. The difference is that a bank does not take the house the moment prices dip. A crypto exchange does, within seconds.

You spend only your own money: $100 buys $100 of the coin.

Nothing is sold for you and you can always wait for a recovery. Leverage turns a normal dip into losing everything, with no chance to wait.

Yes, with Tradeground Pro: practise leverage with pretend money before ever trying it for real. It uses a separate Leverage wallet ($1,000 to start, never ranked on the leaderboard), so your main wallet and rank are never touched.

1. 1Open Wallet. Under Practice portfolios, tap Use on the Leverage wallet (marked Advanced). Trade, Portfolio and History now show the Leverage wallet, until you tap Back to main wallet.
2. 2Open Trade and pick a coin: the order box becomes Leverage order.
3. 3Pick Long (betting on a rise) or Short (betting on a fall), and 2×, 3×, 5× or 10×.
4. 4Type your margin, or tap 25% to 100% of your Leverage wallet cash.
5. 5Check the Liquidation at price in the preview, then open the position.
6. 6Watch it under the chart: profit or loss, the liquidation price, and a bar of the margin left. Close it any time.