Leveraged trading allows investors in the crypto market to take positions larger than their invested capital. It involves borrowing funds to amplify the potential returns from a trade. For instance, using a leverage of 10x, an investor can open a position worth $10,000 with just $1,000 of their own capital.

The concept of leverage magnifies both potential gains and losses. A small price movement in the market can lead to significant profits, but it can also result in substantial losses. It's crucial to comprehend that while leverage increases profit potential, it also heightens the risk.

Furthermore, leverage exposes traders to the risk of liquidation. If the market moves unfavorably, and the value of the position approaches the initial investment amount, the exchange might liquidate the position to prevent further losses.

It's essential for traders engaging in leveraged trading to have a thorough understanding of the market, implement risk management strategies, and be cautious due to the inherent volatility of the crypto market. Proper risk management and trading within one's means are crucial when considering leveraged trading in cryptocurrencies. $ARB $SOL