# Leverage

### What is Leverage?

Leverage allows you to open a position larger than your actual balance by borrowing extra buying power. It multiplies both profits and losses.**Examples:**

* If you have $100 and use **5x leverage**, you control a $500 position.
  * If the price rises by 10%, your profit is $50 instead of $10.
  * If the price drops by 10%, you lose $50 — half your margin.
* With **10x leverage** on the same $100, you control a $1,000 position.
  * A 5% move against you is enough to wipe out your margin and trigger liquidation.

This is why leverage must be used carefully: higher leverage means higher risk.

***

### Managing Leverage in Blum

In Blum, you can set your leverage directly when opening a Perps position:

<figure><img src="https://558275299-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FKpRjZ0c4Zhci5BdeMzgk%2Fuploads%2FLGs7Ni0M1kx1s81BhnxP%2FAdjusting%20Leverage%203.png?alt=media&#x26;token=8a6be0d3-b910-4e15-9044-b74c13d3717f" alt=""><figcaption></figcaption></figure>

1. Open **Blum** in Telegram.
2. Tap **Trade** → **Perps**.
3. Choose the asset you want to trade (e.g. BTC, ETH).
4. In the trading panel, adjust the **Leverage slider** or enter the desired multiplier (e.g. 2x, 5x, 10x, up to 100x).
5. Confirm before placing your order.

Blum will show you the **estimated liquidation price** based on the leverage you select, so you can see how much room your trade has before being closed automatically.

*(Tip: Beginners should stick to low leverage — around 2x to 5x — until they build experience.)*

### Adjusting Leverage

<figure><img src="https://558275299-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FKpRjZ0c4Zhci5BdeMzgk%2Fuploads%2Ffxv0ngKU3xV00b5zO8rJ%2FAdjusting%20Leverage%204.png?alt=media&#x26;token=16b2067c-7cbb-4c92-8bc0-cf734bad5836" alt=""><figcaption></figcaption></figure>

On this screen you can change your leverage setting. This determines your maximum possible order size.

* **Your max position at current leverage** – the maximum position size available to you personally, calculated based on your account balance, unrealized PnL, and currently open orders.
* **Max position at current leverage** – the maximum system-wide limit for this instrument, applied to all traders.

***