Introduction

This article explains how leverage impacts your initial margin, ROI (Return on Investment), and overall risk when trading on Coinlocally Futures. Understanding this helps you manage your exposure and avoid unexpected liquidations.

How leverage affects your position

Leverage determines how much margin is required to open a position.

Your position size (QTY) stays the same regardless of leverage.

Key effects

• Higher leverage → lower initial margin required
• Lower leverage → higher initial margin required
• Unrealized P&L does NOT change when leverage changes
• ROI changes because ROI = Unrealized P&L / Initial Margin

Example

If your unrealized P&L stays the same but you increase leverage:

• Initial margin decreases
• ROI increases

If you decrease leverage:

• Initial margin increases
• ROI decreases

Additional notes

• Leverage does not amplify your unrealized profit directly.
• Higher leverage increases liquidation risk.
• Adjusting leverage does not change your position quantity.

Common Issues

• Traders often assume higher leverage increases profit — it only reduces required margin.
• Changing leverage too close to liquidation may cause margin errors.
• In Isolated Margin mode, leverage cannot be reduced after opening a position.

feeling lost?

If you’re unsure which leverage level suits your strategy, our support team can help you understand the risks and requirements.

Updated on: 01/13/2026