What is Account Leverage?
Account Leverage measures your exposure to risky assets against your Margin Balance.
How does changing leverage affect trading?
Adjusting your leverage changes the margin required to keep positions open, as well as the Available Margin needed to open new positions.
The formulae that determine your open positions are:
Required Initial Margin (IM) = Total Value ÷ Account Leverage
Available Margin = Margin Balance - Required IM
Max Buy = Available Margin x Account Leverage ÷ Asset Price
Note: The live system uses a full risk model to calculate the required IM, which also considers position size and uncleared margin rules (UMR). These formulae are for illustration purposes only.
Your leverage influences the required IM and Max Buy for an open position. When you decrease leverage:
Initial Margin increases
Available Margin decreases
Max Buy decreases
When you increase leverage:
Initial Margin decreases
Available Margin increases
Max Buy increases
Example A
Total Value is US$50,000
Margin Balance is US$10,000
You want to set your leverage to 3x:
Initial Margin = $50,000 ÷ 3 = $16,666.67
Since the resulting value exceeds the Margin Balance, the change is rejected.
You want to set your leverage to 10x:
Initial Margin = $50,000 ÷ 10 = $5,000
Since the resulting value does not exceed the Margin Balance, the change is accepted.
Example B
Total Value is US$50,000
Margin Balance is US$10,000
Asset Price is US$10
You want to set your leverage to 3x:
Initial Margin = $50,000 ÷ 3 = $16,667
Since Available Margin equals zero, no new orders can be placed.
You want to set your leverage to 10x:
Initial Margin = $50,000 ÷ 10 = $5,000
Available Margin = $10,000 - $5,000 = $5,000
Max Buy = Available Margin x Account Leverage ÷ Asset Price = $5,000 x 10 ÷ $10 = 5,000 units
You can place a new order for 5,000 units with the remaining Available Margin.
How is Total Value calculated?
Total Value considers both long and short sides of each instrument where you have open positions or orders. The formulae for both sides are:
Long-side value = (Derivatives position quantity x Mark price) + Σ(Long order quantity x Order price)
Short-side value = (Derivatives position quantity x Mark price) + Σ(Short order quantity x Order price)
To calculate Total Value:
For each instrument, calculate both the long-side value and the short-side value, then take the larger of the two
Sum the larger values across all instruments to derive Total Value
Note: USD Bundle assets are excluded from Total Value calculations.
Example:
The price of BTC is US$110,000
The price of USDC assumes the value of US$1
The price of USDT assumes the value of US$1
Current open positions:
Long 1 BTC perpetual contract
Short 110,000 USDC
Long 20,000 USDT
Since USDC is part of the USD Bundle, it is excluded from the calculations. The Total Value would be $130,000, as calculated by:
Total Value = (1 x $110,000) + (20,000 x $1) = $130,000
Will changing Account Leverage affect the Maintenance Margin Requirement (MMR)?
No. Changing your leverage does not change your MMR, so your current risk level stays the same.
Could my account leverage change be rejected?
Yes. After you set a new leverage, the required IM is recalculated. If it exceeds your Margin Balance, the change is rejected. To avoid this, you can add funds to your Wallet, reduce your position size, or select a higher leverage and try again.