2026-01-02 11:21:55

A beginner wants to ask a question about leveraged trading. I use 10X leverage for trading. Theoretically, liquidation should only be triggered when the price drops by 10%, right? But now the exchange will close positions early to prevent liquidation, yet I still don't understand why it gets wiped out at just a 5% drop. Is it related to the margin rate? Can any expert help explain the logic behind this?

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PumpBeforeRug

· 7h ago

Bro, this is because you haven't understood the maintenance margin rate... The liquidation line set by the exchange is often ahead of the theoretical liquidation point, to prevent you from being wiped out and having your position taken in the opposite direction.

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GasFeeSobber

· 7h ago

Bro, this is the trap of leverage trading—margin requirements and fees both cutting into your gains.

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DefiSecurityGuard

· 7h ago

⚠️ CRITICAL: liquidation mechanics aren't just about the math, there's the maintenance margin threshold nobody explains properly. your exchange is likely liquidating at 5% because of how they calculate it—not pure 10x inverse. DYOR on their docs, tbh.

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