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What is leverage in crypto trading?
Leverage is trading with borrowed money so a position is larger than the funds you put up. With 5x leverage, a deposit of 100 controls a position worth 500. Gains and losses are both multiplied by the same factor.
What it means for you
At 5x leverage, a 20% move against you can erase your whole margin, and the platform can close the position automatically before you can react. A regulator warns that leveraged traders can lose more than their initial investment. Check the liquidation price before opening a position, not after.
Sources: CFTC: Understand the Risks of Virtual Currency Trading, Hyperliquid docs: Contract specifications · checked 4 October 2026
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