A leveraged position involves borrowing funds to increase the potential return on an investment in cryptocurrency. Traders use leverage to buy more assets than they could with their own capital alone. For example, if a trader uses 2x leverage, they can control $2,000 worth of assets while only investing $1,000 of their own money.While this can amplify profits, it also increases risk. If the market moves against the trader’s position, losses can be magnified, potentially leading to a margin call where the trader must deposit more funds to maintain the position or risk liquidation. Leverage is often expressed as a ratio, like 5:1 or 10:1, indicating how much larger the position is compared to the initial investment. While it can enhance gains, it’s crucial for traders to understand the risks and use risk management strategies to safeguard their capital. Proper education and caution are essential when engaging in leveraged trading.