Hafez Financial Services


What is the difference between margin and leverage in futures platforms?


If you enter futures platforms like Bainance Futures, you will find that there are two general sections for us.
There is a margin section that has two general modes: One is the Cross mode and the other is the isolated mode, which we determine ourselves; And there is a part of the leverage that we consider this number in our positions based on the level of risk. For the leverage section, suppose I have $100 in my account. When I use Leverage 20, that means $100 multiplied by 20 and the exchange gives me this amount of credit and I can use it in my positions. Naturally, when I do this, my profit and loss are calculated with the same coefficient that I set for my leverage.
Because the cryptocurrency market is a volatile market and the range of price fluctuations is not limited, the higher the leverage, the higher the level of risk. The exchange will warn you about this according to an alarm, so naturally if you want to use leverage, enter the futures section or choose a lever managed for yourself, this position can have a different leverage. Another part that we have in exchange offices is the margin section which has two general modes: Cross and Isolated. I advise you to always be in isolation mode.
Suppose I have $1000 in asset and I put it in the futures section. Naturally, I manage it to lower my risk level. I put $20 in each position, now when I use the isolated mode, I set aside $20 to open a position. The worst case scenario is that I did not set a limit for myself.
The leverage that I have considered is too high which will destroy all the position and the amount that is inside.

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