How to adjust the current leverage on Upbit

Leverage trading on Upbit involves configuring a leverage account, calculating the leverage multiplier and position size, and understanding risk management considerations such as margin calls and funding fees.

Nov 11, 2024 at 02:50 pm

How to Adjust the Current Leverage on Upbit

Upbit, a leading South Korean cryptocurrency exchange, allows users to trade various digital assets with leverage, enabling them to amplify their potential profits (or losses) by borrowing capital from the platform. However, it is crucial to understand the risks associated with leveraged trading and exercise proper risk management practices. This guide will provide a comprehensive overview of how to adjust the current leverage on Upbit, ensuring you can trade effectively while mitigating potential risks.

Step 1: Configure a Leverage Trading Account

• Create an Upbit account if you don't have one already.
• Complete the identity verification process to activate advanced features, including leverage trading.
• Navigate to the "Settings" page and select the "Leverage Trading" tab.
• Choose the desired leverage level for each asset you want to trade with leverage. The available options range from 1x to 20x.
• Read and agree to the terms and conditions governing leverage trading on the platform.

Step 2: Calculate the Leverage Multiplier

• The leverage multiplier represents the ratio between the amount of capital you contribute and the amount borrowed from the exchange.
• For example, if you set the leverage to 5x and contribute 1,000 USDT to a trade, the exchange will provide you with an additional 4,000 USDT, resulting in a total trading capital of 5,000 USDT.
• The leverage multiplier is calculated as follows: Leverage Multiplier = Leverage Level (expressed in decimals) + 1.

Step 3: Determine the Position Size

• The position size refers to the amount of the underlying asset you will purchase or sell using leverage.
• To calculate the position size, divide the total trading capital by the leverage multiplier.
• Continuing with the previous example, if the leverage is 5x and the trading capital is 5,000 USDT, the position size would be 5,000 USDT / (5.0 + 1) = 833.33 USDT.

Step 4: Adjust the Leverage on an Open Position

• If you have an open position that you want to adjust the leverage for, follow these steps:
• Open the "My Orders" page and select the relevant trade.
• Click on the "Adjust Leverage" button.
• Enter the desired leverage level and confirm the changes.
• Remember that adjusting the leverage can have significant implications for the risk profile of your position.

Additional Considerations:

• Risk Management: Leverage trading magnifies both potential profits and losses. It is essential to implement robust risk management strategies, such as setting stop-loss and take-profit orders, to limit potential losses.
• Margin Call: If the market moves against your position and your margin balance falls below the required level, the platform may trigger a margin call. This could result in your position being forcibly closed or your assets being liquidated.
• Funding Fees: Upbit charges funding fees on positions held overnight. These fees can accumulate over time, potentially eroding your profits if the position is not closed within a short period.
• Expertise: Leverage trading requires a high level of expertise and market knowledge. Beginners should proceed with caution and consult with experienced traders before engaging in such trades.