Many traders get confused when opening a position in futures contracts. Let's understand the equation simply through the trading interface:
1️⃣ Leverage:
In the attached example, the leverage is set to 10x. This means the purchasing power for each dollar you own has multiplied by 10.
2️⃣ Amount:
When we enter 20 USDT in the amount field with a leverage of 10x, this means that the total size of the trade is 20 dollars.
The equation: the written amount ÷ leverage = used capital (cost).
In this example: 20 ÷ 10 = 2 USDT.
3️⃣ Cost field:
Note that next to the word "cost" the actual amount that will be deducted from your wallet appears. This amount represents your actual capital used in the trade (Margin), which is shown here as approximately 1.99 USDT.
Why 1.99 and not 2? Because the system deducts the "opening trade fee" in advance from the displayed cost to ensure full coverage of the transaction.
💡 Beginner tip: Always monitor the "cost" field before clicking on "Buy" or "Sell", as it determines how much money you are actually risking from your wallet.
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Note: This is still not encouraging any specific trade; the goal is educational.
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