Adjust Leverage

In crypto trading, leverage is a powerful tool that allows traders to control larger positions with a smaller initial investment. Adjusting leverage can significantly impact your risk and potential reward. However, on Flipster, leverage is governed by the Position Bracket System, where maximum leverage and maintenance margin requirements depend on your position size.

This article explains how adjusting leverage works, including examples and important considerations under the Position Bracket System.

What Is the Position Bracket System?

Flipster uses a Position Bracket System to manage risk.

Each trading pair is divided into multiple brackets (tiers), and each bracket defines:

• Maximum position size
• Maximum allowable leverage
• Maintenance margin rate
• Maintenance amount

As your position value increases:

• Your maximum leverage decreases
• Your maintenance margin requirement increases

This means larger positions require more margin to maintain and carry higher liquidation risk.

How to Adjust Leverage of a Position

1. Tap on the Market Tab
   • In the Flipster interface, find and tap on the [Market] tab. This is where you can view and select the different types of markets available to trade, including perpetual contracts.
   • Once you’re in the Market section, tap on [Perpetual] to access the perpetual trading options. This is where you can manage your open positions and leverage.
   • Look for the trading pair that you currently have an open position in. For example, if you have an open position in BTCUSDT, locate and select that specific pair to proceed with the leverage adjustment.
2. Tap on Adjust Leverage Under Open Positions
   • Under the [Open Positions] section, find the position you want to adjust leverage. Tap on the [Adjust Leverage] option under your open position.   

3. Choose Your Desired Leverage
   • You will now be presented with an option to set the leverage you want to apply to your position. You can adjust the leverage based on your risk tolerance and market outlook. Simply select the leverage amount that fits your strategy.
   • After selecting the desired leverage, tap on [Confirm] to finalize the adjustment. The new leverage will be applied but will only take effect on new positions being added.

⚠️ Important:
The new leverage only applies to new position size added after the adjustment. Your existing position remains unchanged.

How Adjust Leverage Works Under the Position Bracket System

The Adjust Leverage function allows traders to change leverage for future additions to a position. However, leverage is always limited by your current position bracket.

Important Notes

• Maximum leverage depends on your position bracket. Larger positions fall into higher brackets with lower leverage caps.
• Maintenance margin increases as your position grows. Adding size may move you into a higher bracket even if leverage remains the same.
• Higher Leverage = Higher Risk: Liquidation price moves closer to market price.
• Lower Leverage = Higher Margin Required: You must add funds before lowering leverage.
• Adjusting leverage does NOT change your current margin or liquidation price.
• Changes only apply to new size added afterward.
• Decreasing leverage is only possible if you have already added funds.
• Isolated Margin Only: Leverage adjustments apply per position.
• The interface will not display effective leverage after adjustment; it recalculates automatically once new size is added.

Leverage Cap

Users may be restricted to a maximum of 5x leverage when both conditions below are met:

• Lifetime deposit is below 30 USDT
• Lifetme deposit is less than half of their Trading Bonus balance

This applies in One-way Mode regardless of isolated or cross margin.

Adjust Leverage When There is an Existing Position (One-way Mode)

Behavior depends on the leverage of the current active position for that symbol:

When holding a position with leverage above 5x:

• Adjust Leverage is not allowed. The current system does not support lowering leverage in One-way Mode.
• Users must reduce or close the position before they can operate under the 5x cap.

When holding a position with leverage at or below 5x:

• Adjust Leverage is allowed, up to the maximum allowed cap (5x if restricted).
• Any new size added will follow the updated leverage setting.

If no new position is added:

To ensure that the adjusted leverage (specifically increasing leverage) is reflected correctly, user will need to remove the excess margin from the current position. This can be done through the Adjust Funds Invested function. 

Visit the Adjust Funds Invested article here, under How to remove funds for more information. 

Note: The following examples use USDT for simplicity. The same principles and calculations apply to USD1-quoted perpetual swap contracts.

Example 1: Increasing Leverage

Let’s say you opened a long position of 1 BTC at 90,000 USDT with 10x leverage, using 9,000 USDT as your margin. The liquidation price of this position will depend on other factors and leverage.

Now, you decide to increase your leverage to 20x. However, this will not affect your current margin or liquidation price for the 1 BTC position you opened at 90,000 USDT. The new leverage setting will only apply to any new positions you add after this adjustment.

Example:

• Original Position: 1 BTC at 90,000 USDT with 10x leverage requiring 9,000 USDT margin.
• After Adjusting Leverage to 20x: Your margin requirement is halved to 4,500 USDT. However, this only applies to new positions you added after making this adjustment. Your current position of 1 BTC at 90,000 USDT with the 9,000 USDT margin requirement remains unchanged.
  
   

What Happens When You Add a Position After Increasing Leverage?

When you increase leverage and add to an existing position, the following changes occur:

1. Position Size Increases: The size of the position grows as more funds are added using the adjusted leverage.
2. Effective Leverage Updates: The effective leverage recalculates to reflect the new combined position size and margin.
3. Liquidation Price Adjusts: Adding to the position with higher leverage shifts the liquidation price closer to the current market price, increasing risk.

Initial Position Setup

• Direction: Long
• Entry Price: 90,000 USDT
• Leverage: 10x
• Margin (Initial Margin): 9,000 USDT
• Position Value (Contract Size): 1 BTC × 90,000 USDT = 90,000 USDT
• Maintenance Margin: 450 USDT
• Liquidation Price: 90,000 - [(9,000 - 450) / 1] = 81,450 USDT

You decided to increase leverage to 20x and another 1 BTC to your position at the same entry price of 90,000 USDT.

1. New Margin Requirement for Additions: 90,000 / 20 = 4,500 USDT
2. Total Position Value (Contract Size): 2 BTC × 90,000 USDT = 180,000 USDT
3. Total Margin: 9,000 (existing) + 4,500 (new) = 13,500 USDT
4. Liquidation Price After Adding Position
   • New Maintenance Margin: 2 x 90,000 x 0.5% = 900 USDT
   • Updated Liquidation Price: Average Entry Price - [(Total Margin - Maintenance Margin) /  Total Quantity]
     • Liquidation Price: 90,000 - [(13,500 - 900) / 2
     • Liquidation Price: 83,700 USDT
5. Effective Leverage: While the new leverage (20x) applies to the additional position, the effective leverage of the entire position recalculates.
   • Effective Leverage = Total Position Value / Total Margin
   • Effective Leverage = 180,000 / 13,500 
   • Effective Leverage = 13.33x

Illustration:

Initial Position

After Adjusting Leverage to 20x and Adding 1 BTC position

Example 2: Decreasing Leverage

If you want to decrease leverage, you will need to have added funds to your position previously. Decreasing leverage increases the required margin, thus requiring additional funds to be in place before the leverage adjustment can be applied.

Example:

Let’s say you have a 1 BTC position at 90,000 USDT with 10x leverage, and your margin is 9,000 USDT. Now, you want to decrease your leverage to 5x to reduce the risk of liquidation.

• To decrease leverage: You need to add funds to your position. For example, if you add 9,000 USDT to your margin, you can now decrease your leverage to 5x.
• Effect on Position:
  • Original Position: 1 BTC at 90,000 USDT with 10x leverage, requiring 9,000 USDT margin.
  • After Adding Funds and Decreasing Leverage to 5x: The required margin for the position increases to 18,000 USDT. By adding funds, your leverage decreases, and your liquidation price moves further away from the entry price, lowering the risk of liquidation.

Important: Position Bracket Limits Your Maximum Position Size

You cannot add more size once you reach the maximum allowed for your current bracket.

To open a larger position:

✅ Lower leverage
⚠️ Provide additional margin

Lower leverage increases required margin because higher brackets carry higher maintenance margin requirements.

Risk Warning:

Trading in cryptocurrency involves risk and potential losses. Before trading, please make your investment decisions cautiously by considering your investment objectives, experience, and risk tolerance. You are solely responsible for your investment decisions, and Flipster is not liable for any losses you may incur. Derivatives trading, in particular, is subject to high market risk and price volatility. Please obtain independent advice where appropriate. This information should not be construed as financial or investment advice.

Have more questions? Submit a request