Crypto Leverage Trading: How It Works, What It Costs and How You Get Liquidated

Leverage trading crypto means opening a position larger than the money behind it. That one decision changes how a trade is built, what it costs while it stays open, and how it ends when the price goes the wrong way. This guide explains each of those steps, what to check before you commit money, and where the venues differ. It is written for someone who has bought and held crypto and never traded it with borrowed exposure — or with a fixed stake against the house.

Two models are covered side by side: margin and perpetual futures on an exchange, where you are matched against other traders and back the position with collateral you can be asked to top up, and the fixed-stake model used by Moon.com, where a set amount is bet against the house. They share the arithmetic and differ in almost everything else. The platform itself is covered in our full Moon.com review.

What leverage does to a crypto position#

Leverage lets a position be larger than the money behind it, and it shrinks the adverse move that ends the position by the same factor: the fatal move in percent is 100 divided by the leverage. Our guide to how 1000× leverage works tables that arithmetic. What this page adds is the vocabulary an exchange wraps around it. The full size of the position is the notional; the collateral you put up is the initial margin; the minimum equity the position must keep is the maintenance margin, and the ratio between them is what the platform watches.

Exchanges also make you choose how that collateral is ring-fenced. Under isolated margin only the margin assigned to one position can be lost; exhaust it and the position closes while the rest of the account stays untouched. Under cross margin the whole balance backs every open position, which delays a liquidation but lets one bad trade drain funds meant for others. The choice decides what a liquidation actually takes.

Leverage is symmetrical. It does not improve your odds of being right about direction; it multiplies the consequences and shortens the time you can afford to be wrong. You do not need to misjudge the market by a wide margin to lose money trading crypto with leverage. A small, ordinary move that arrives before your thesis can play out is enough.

How a leveraged trade is built and unwound#

On an exchange the sequence runs like this. You deposit collateral, pick a market, a margin mode and a leverage multiple, and open a long or short of a chosen notional. The exchange locks the initial margin, marks profit and loss against the live price and shows a margin ratio that climbs as the trade goes against you. Close the position yourself and the difference settles to your balance; let the ratio hit the maintenance threshold and the exchange closes it for you, at a worse price and usually with a fee.

Moon compresses that into a bet. You pick a market, a direction, a stake and a leverage between 1× and 1000×, and the slip shows the bust price before you confirm. There is no margin mode and no notional to size, because the stake is the whole commitment. Cash out early and the dialog states that unrealised profit or loss is added to your account; reach the bust level and the bet is over.

What a leveraged position costs#

Exchange costs come in three layers. A trading fee is charged on the notional when you open and again when you close, so it scales with leverage: the bigger the position, the bigger the fee, even though your margin stayed the same. Perpetual contracts then charge or pay a funding rate at set intervals to keep the contract price near spot; interval and rate are fixed per venue. Every exchange publishes its own schedule and the numbers move.

Moon's schedule has four items. The opening fee is 1% of the stake — the stake, not the leveraged exposure. A performance fee of at least 10% comes off realised profit; losing bets pay none. A holding fee is charged every 8 hours a bet stays open, sized by stake and leverage, at a rate Moon calls dynamic and displays in-app rather than publishing. A liquidity adjustment applies at close. Read the holding rate on your own slip before any bet that might run past eight hours; our fees guide has the detail.

The practical lesson: on an exchange, high leverage makes each trade more expensive because fees ride on notional. On Moon the opening fee rides on the stake, so leverage does not raise the cost of opening a bet; the holding fee does scale with leverage if the bet stays open past eight hours. What leverage mainly raises is the probability that the bet ends at the bust price. Either way, crypto trading with leverage carries a negative expected value — the fees and the spread are what make it so.

How you get liquidated — and where the two models diverge#

On an exchange you watch it happen through the margin ratio. As the price moves against you the ratio climbs, and most venues flag a warning band before the maintenance level. Cross it and the liquidation engine takes over: large positions are often cut in tiers until the ratio is back under the threshold. The fill lands at whatever the book offers and a liquidation fee is deducted; on a fast move any remainder falls to the venue's insurance fund or, when that is exhausted, to auto-deleveraging of profitable traders.

Moon's terms set out a different structure. Moon is the house and the counterparty to every bet, with a stated financial interest in its outcome, and the maximum loss on a bet is the stake — negative balances are ruled out. Two caveats sit alongside that: automatic settlement may occur at a price less favourable than the last displayed quote, and Moon gives no guarantee that a bet's value tracks the external market at every moment. Prices come from DXFeed, Pyth Network and SEDA, which Moon says it does not create or manipulate.

• ▸Exchange: a liquidation carries its own fee. Moon: a bust takes the stake; the performance fee applies only to realised profit, so a bust pays none.
• ▸Exchange: you can hedge one position with another. Moon: opposing bets on the same market, including across accounts, are prohibited by its terms.

What to check before you trade cryptocurrency with leverage#

1. Find the liquidation or bust price and compare it with the live price before every confirmation. If the distance is smaller than the asset's normal minute-to-minute flicker, you are betting on noise.
2. Read the current fee schedule, including funding or holding charges, and work out what an open position costs per day at your size.
3. Establish who the counterparty is: other traders through a matching engine on an exchange, Moon itself on Moon, as its terms disclose.
4. Check the licence and what it covers. Moon is licensed by the Offshore Finance Authority of the State of Anjouan (licence ALSI-202601063-FI2, shown as VALID in the official register); that covers no deposit insurance or ombudsman, and disputes go to a complaints process and then arbitration under Comorian law.
5. Set auto-profit and auto-loss at the same time as the stake, decide the amount before you open the tab, and treat it as spent.

Account rules matter as much as fees. Moon accepts registrations only from residents of countries where it is available, and its terms exclude both sanctioned jurisdictions and any country whose local licence Moon does not hold — check the list before you sign up. On identity checks the paper and the practice differ: Moon's help centre reserves a KYC step before the first deposit, while in our own real-money test in August 2026 no documents were requested. Assume the check can be switched on at any time, particularly for larger amounts; keep balances small and withdraw regularly.

Rehearse first. Every Moon account includes a Play Money balance of $100,000, refillable without limit, with the same wagering features as the live platform — supported markets, leverage, and profit and loss controls — though Moon notes market conditions may differ from live. Moon's play money guide has a practice plan; the short version is to run a batch of bets at the leverage you intend to use and record how long each lasts before any real deposit.

Where you can trade crypto with leverage#

There are three broad venues. Centralised exchanges such as Binance and Bybit offer margin and perpetual futures with their own fee schedules and eligibility rules that vary by country. Decentralised perpetual protocols run the same model on-chain, with a smart contract as the venue and a wallet instead of an account. Fixed-stake platforms like Moon.com take the third route: no order book, no margin, a bet settled against the house's quoted price. None is available everywhere; which is open to you depends on where you live.

On Moon the leverage range is 1× to 1000×, depending on the market and conditions, across 40 markets at our count in August 2026 — 19 of them cryptocurrencies, plus stocks, commodities, forex and indices. Timeframes run from one second to a week, markets stay open at weekends, and deposits and withdrawals are in crypto, with card purchases through a third-party provider. In our own test we deposited $50 in USDC, placed 1000× bets and had a $51.68 withdrawal marked as sent 38 minutes later, for a $1.00 fee and an email code — a sample of minutes, not evidence about odds.