How to use Crypto.com leverage

Crypto.com offers leverage trading options to amplify potential profits (and losses) via increased trading size, highlighting the need for understanding associated risks before engaging in such transactions.

Nov 26, 2024 at 08:24 pm

How to Use Crypto.com Leverage

Crypto.com offers a variety of leverage options for its users, allowing them to increase their potential profits (and losses) when trading cryptocurrencies. Leverage is a powerful tool that can be used to amplify returns, but it is important to understand the risks involved before using it.

What is leverage?

Leverage is a financial tool that allows traders to borrow funds from a broker to increase their trading size. This can be used to increase the potential profits from a trade, but it also increases the potential losses. For example, if a trader uses 10x leverage on a $1,000 trade, they will be able to trade as if they had $10,000. This could result in a $1,000 profit if the trade goes their way, but it could also result in a $1,000 loss if the trade goes against them.

How to use Crypto.com leverage

To use leverage on Crypto.com, you will need to:

1. Open a Crypto.com account. If you don't already have a Crypto.com account, you can create one by clicking here.
2. Fund your account. You can fund your Crypto.com account by depositing cryptocurrency or fiat currency.
3. Enable leverage trading. To enable leverage trading, you will need to go to your account settings and click on the "Enable Leverage Trading" button.
4. Choose a leverage level. Crypto.com offers a variety of leverage options, ranging from 1x to 10x. The higher the leverage level, the greater the potential profits and losses.
5. Place a trade. Once you have enabled leverage trading and chosen a leverage level, you can place a trade by selecting the cryptocurrency you want to trade and entering the amount you want to trade.

Risks of using leverage

There are a number of risks associated with using leverage, including:

• Increased risk of losses. Leverage can amplify both profits and losses. This means that if your trade loses if a trade goes againstyou, you could lose more money than you originally invested.
• Margin calls. If the value of your collateral falls below a certain level, Crypto.com may issue you a margin call. This means that you will need to deposit additional funds into your account to maintain your leverage position. If you cannot meet a margin call, Crypto.com may liquidate your position.
• Liquidation. If the value of your collateral falls below a certain level, Crypto.com may liquidate your position. This means that you will be forced to sell your cryptocurrency at the current market price, regardless of whether or not it is a favourable price.

How to manage the risks of leverage

There are a number of things you can do to manage the risks of leverage, including:

• Use a stop-loss order. A stop-loss order is an order that automatically sells your cryptocurrency if it falls below a certain price. This can help to limit your losses if a trade goes against you.
• Only use leverage on trades that you are confident in. Don't use leverage on trades that you don't understand or that you are not comfortable with.
• Monitor your positions closely. Keep an eye on the value of your collateral and make sure that you are prepared to meet a margin call if necessary.

Conclusion

Leverage can be a powerful tool for increasing your potential profits when trading cryptocurrencies. However, it is important to understand the risks involved before using it. By following the steps outlined above, you can help to manage the risks of leverage and use it to your advantage.