What is Leverage?
Leverage allows you to trade larger positions than your initial capital by borrowing funds. On Jupiter Perps, you can use leverage to increase your position size, allowing you to amplify potential profits. However, leverage also increases risk, as both gains and losses are magnified.
How Leverage Works
When you open a position with leverage, you’re essentially borrowing capital from the platform to control a larger position than you could with your own collateral. For example, with 100x leverage, you can control a position worth 100 times the amount of collateral you’ve deposited.
The leverage you choose impacts the size of your position and the potential for profit or loss. However, higher leverage also means higher risk. A small price movement against your position can lead to liquidation if your collateral isn’t enough to cover the loss.
Leverage Limits
Jupiter Perps offers leverage up to 250x for SOL, ETH and wBTC. You can adjust your leverage depending on the size of your position and the risk you’re willing to take. The more leverage you use, the higher the potential profit, but the greater the risk of liquidation.
Leverage Slider
The Leverage Slider on the Jupiter Perps interface allows you to easily adjust your leverage. Moving the slider lets you select leverage from 1.1x to 100x or 250x, depending on your risk appetite and strategy.
The leverage lock feature allows you keep trading at your leverage preference fuss free!
Margin and Maintenance Margin
When using leverage, your initial margin (collateral) is the amount you must deposit to open the position. The maintenance margin is the minimum collateral required to keep your position open. If your collateral falls below the maintenance margin due to losses, you’ll receive a PnL call to add more collateral. If not replenished, your position will be liquidated.
Risks of Using Leverage
While leverage can amplify profits, it also increases the risk of liquidation. If the market moves against you, your position can be closed automatically if your collateral isn’t enough to cover the loss. It’s crucial to manage leverage carefully, monitor your PnL, and use tools like stop-loss orders to mitigate risk.
Best Practices for Using Leverage
- Start small: Begin with lower leverage and increase as you gain confidence and experience.
- Use stop-loss orders: Always set stop-loss orders to limit potential losses.
- Monitor your position: Keep an eye on your PnL and collateral to avoid liquidation.