Is 10x leverage really that risky?

[NateFolzer 2]

I understand the basic idea behind leverage, but I'm still confused about how quickly a position can actually get into trouble. If someone uses 10x leverage, does a relatively small move in the wrong direction really have that much impact on their margin? And how does the liquidation price come into play? I'm trying to understand the mechanics before even thinking about using leverage, so real examples would be helpful.

[inkateries 7]

Yeah, the part that helped me was looking at leverage in terms of the position size vs. your actual margin. With 10x, even a 1% move against the position can represent roughly a 10% loss on the margin before fees and other factors. This explains the relationship between leverage, margin and liquidation pretty clearly: https://evedex.com/en/blog/what-does-leverage-mean/. The higher the leverage, the less room you have for the market to move against you, so that part is worth understanding before focusing on potential returns.