What are the differences between 10x and 75x leverage for perpetual contracts?
- WBOYOriginal
- 2024-08-08 13:03:011007browse
The leverage ratio of perpetual contracts is divided into 10x and 75x. The liquidation risk, margin requirement, profit potential and loss risk of 75x leverage are all higher than that of 10x leverage. 10x leverage is suitable for novices focused on risk management, while 75x leverage is suitable for experienced traders. In addition, 75x leverage has higher transaction fees, poor liquidity, and may trigger margin calls under extreme market conditions.
Difference between Perpetual Contract 10x and 75x Leverage
Leverage
- Perpetual Contract 10x Leverage: Allows longs or shorts to magnify trading positions 10x.
- Perpetual Contract 75x Leverage: Allows long or short positions to amplify trading positions 75 times.
Risk Management
- Liquidation Risk: The liquidation risk of 75x leverage is much higher than 10x leverage. Higher leverage magnifies the impact of market fluctuations on account balances, leading to faster liquidations.
- Margin Requirements: 75x leverage requires a higher margin to maintain the position. Insufficient margin may result in a margin call or automatic liquidation.
Profit Potential and Risk of Loss
- Profit Potential: 75x leverage can amplify potential profits, but it also increases the risk of loss.
- Risk of Loss: The risk of loss is significantly higher with 75x leverage compared to 10x leverage. Market fluctuations can lead to rapid losses or even liquidation.
Suitable for the crowd
- 10x leverage: Suitable for novices or conservative traders with low risk tolerance and emphasis on risk management.
- 75x Leverage: Suitable for experienced traders who have a high risk tolerance and understand the potential consequences of taking higher risks.
Other Considerations
- Trading Fees: Trading fees for 75x leverage are generally higher than 10x leverage.
- Liquidity: Highly leveraged trades may be more difficult to close, especially in less liquid market environments.
- Margin Calls: Under extreme market conditions, exchanges may issue margin calls, requiring traders to replenish margin or face position liquidation.
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