# Leverage

K-BIT supports leverage functionality for user trades. To utilize leverage in trading, collateral assets are required. When collateral is in place, users can execute trades for amounts greater than their available assets. The user's trade amount is calculated as follows:

<br>

$$
PositionSize = Margin \* Leverage
$$

* Margin = Collateral assets used for trading
* Leverage = Desired leverage ratio for the trade (The minimum leverage on K-BIT is 3)

When using leverage in trading, all profits and losses are settled based on the trade amount, which can result in higher gains or losses relative to the collateral. The detailed calculation can be confirmed through the following examples.

#### **Example 1:** KLAY = $0.2, Margin = $200, Leverage = 10, Position Size = $2,000

* If the KLAY price increases by 5%
  * KLAY = $0.21 Position Size = $2,100 PnL = $100 (+50%)
* If the KLAY price decreases by 5%
  * KLAY = $0.19 Position Size = $1,900 PnL = -$100 (-50%)

#### **Example 2:** BTC = $70,000, Margin = $7,000, Leverage = 100, Position Size = $700,000

* If the BTC price increases by 1%
  * BTC = $70,700 Position Size = $707,000 PnL = $7,000 (+100%)
* If the BTC price decreases by 1%
  * BTC = $69,300 Position Size = $693,000 PnL = -$7,000 (-100%)

As shown, using leverage can result in significant gains or losses even with small price fluctuations. Therefore, K-BIT users should carefully consider their trading style and the risks associated with trading.

<br>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.k-bit.xyz/k-bit/leverage.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.