Leverage & Margin

Understanding leverage and margin is crucial for trading perpetual futures safely.

What is Leverage?

Leverage allows you to control a larger position with less capital.

Example:

You have $1,000
With 10x leverage, you can open a $10,000 position
A 1% price move = 10% gain/loss on your capital

How Leverage Works

Amplified Returns

Price Move	1x Return	10x Return	20x Return
+5%	+5%	+50%	+100%
+1%	+1%	+10%	+20%
-1%	-1%	-10%	-20%
-5%	-5%	-50%	-100%

Liquidation Risk

Higher leverage = closer liquidation price

Leverage	Approx. Liquidation Distance
1x	~100% (can't be liquidated)
5x	~20%
10x	~10%
20x	~5%
50x	~2%
100x	~1%

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High leverage is extremely risky. A small adverse move can liquidate your entire position. Start with low leverage (1-5x) until experienced.

Margin Types

Initial Margin

The collateral required to open a position.

Initial Margin = Position Size / Leverage

Example:

$10,000 position at 10x leverage
Initial Margin = $10,000 / 10 = $1,000

Maintenance Margin

The minimum collateral to keep a position open.

Usually lower than initial margin
Position liquidated if equity falls below this
Varies by exchange and symbol

Available Margin

Your remaining balance after accounting for open positions.

Available Margin = Total Balance - Used Margin

Setting Leverage

In the Trade Entry widget:

Pick a value from the leverage presets, or type a specific value in the input
Leverage is sent to the exchange for the symbol and applies to new orders
It's clamped to the symbol's maximum
Your preferred default leverage is remembered between sessions

Auto-leverage

The widget can set leverage for you each trade:

Off — you set it manually (default)
Max — always use the symbol's maximum leverage
Risk-based — derive leverage from your risk-per-trade and stop-loss settings, so a fixed dollar risk maps to a leverage level

Auto-leverage modes and their inputs live in the trading settings.

Maximum Leverage

Maximum leverage varies by:

Exchange rules
Symbol (major pairs often allow higher)
Account tier

Margin Modes

Cross Margin

All available balance used as margin
Lower liquidation risk, but the whole balance is exposed

Isolated Margin

Only the allocated margin is at risk
Higher liquidation risk, but losses are capped at the position margin

On venues that expose it (currently Binance), CubeTerminal shows a Cross/Isolated toggle in Trade Entry — note the exchange rejects the switch while you have an open position or orders on the symbol. On other venues, set margin mode in the exchange's own settings.

Best Practices

For Beginners

Start with 1-3x leverage
Use isolated margin
Small position sizes
Always use stop-losses

For Experienced Traders

Match leverage to conviction
Consider volatility
Account for funding rates
Monitor liquidation price

Risk Management

Never use max leverage
Keep liquidation price far from current price
Maintain available margin buffer
Consider reducing leverage in volatile markets

Calculating Position Size

Based on Risk

Position Size = (Account * Risk%) / (Leverage * Stop%)

Example:

$10,000 account
Risk 2% per trade ($200)
10x leverage
2% stop-loss

Position Size = $200 / (10 * 0.02) = $1,000 notional

Based on Available Margin

Max Position = Available Margin * Leverage

Example:

$5,000 available margin
10x leverage
Max Position = $50,000

Order Types Risk Management