A real case of rolling over leveraged positions—enough to make your palms sweat.

A certain trader used a principal of 500,000 to go long on Ethereum with leverage at the $2,840 level, with unrealized profits peaking at 3.34 million. The numbers on paper were very tempting, but the cost of rolling over the position was that the liquidation price was pushed up to $3,000—a dangerously risky spot in a volatile market.

During a rapid pullback in the early morning, the price dropped below $3,000, triggering two consecutive liquidations. The position shrank directly from its peak to 730,000, with over 3 million in profits basically wiped out. Even more precariously, there was only a $42 buffer left before the next liquidation.

The direction was right—Ethereum was indeed going up. But with high leverage combined with rolling over positions, even slight volatility can be disastrous. In a market that’s swinging back and forth, there’s virtually zero room for error with this approach.

Leverage trading is a double-edged sword; used well, it can accelerate profits, but if used poorly, it’s a capital shredder. What level of leverage do you usually use?