Price moves of 10% or more aren’t unusual in the crypto trading world, so higher leverage brings a greater risk of liquidation. A vibrant market can reduce volatility risk. Consider Isolated Margin: Margin trades use either cross margin or isolated margin. Trade High-Volume Assets: Bitcoin and similar popular crypto assets that trade with high volume typically trade with a smaller spread between bid and ask prices compared to thinly traded assets. Cross margin can put other account assets at risk if the price direction doesn’t favor your trade. Limit Your Investment Amount: As with all investments, never bet more than you can afford to lose. As its name suggests, isolated margin limits your margin exposure to the margin you’ve assigned to a particular trade.

If you’re a risk-taker, OKX might be your go-to. As the longest-established exchange in our roundup, Kraken’s roots date back to 2011, building a trusted name through consistent service, low fees, and flexible funding options. Kraken is among few exchanges to offer margin trading to qualified US traders, providing leverage opportunities as high as 5x (specifically to US users). While OKX is a powerhouse in Asia (This Web site) and rapidly expanding in Europe, it’s not yet a household name in the west. Maker fees are just 0.02%, and taker fees sit at 0.05% for perpetual contracts. That said, like many centralized exchanges, OKX comes with geographical restrictions. But it’s not just about high leverage-OKX also stands out with its low fees for futures trading. It’s unavailable in regions like the US, UK, and Canada.

This allows you to diversify while also maximizing earning potential on trades.

Leverage trading can make trading more efficient, assuming your trades are profitable. Hedge Your Portfolio: Using leverage and margin allows you to hedge your portfolio if, for example, you keep a core position but think the short-term price direction might trend downward. For example, with 5x leverage, you can purchase $500 of assets with $100 of margin. Compared to non-leverage trading, you can increase your gains by 5 times as well, with less trading costs. More Efficient Use Of Capital: By using leverage, you can take on more trades as you find opportunities. This allows you to diversify while also maximizing earning potential on trades. Greater Potential Gains: The leverage ratio drives your gains.

Kraken is one of the few exchanges that offers leverage trading in the US but the US must be Eligible Contract Participants (aka ECP-Certified). Between 40% to 80% of your initial margin, liquidation is at Kraken’s discretion. If you want to learn even more about which platforms are best for trading, check out our guide on crypto research tools. So, basically you need to be a rich snob to trade leverage in the US. At least $5 million in assets tied to futures trading purposes (hedging or investment). Initial margin requirements start at 20%. Maintenance margin requirements offer some flexibility with a floor at 40% or lower, at which point Kraken will liquidate your margin collateral.