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Contract position 1000U
Plan 1: 100U margin with 10x leverage;
Plan 2: 50U margin with 20x leverage;
Is there a difference between the two?
Plan One: 10x Leverage: If the market price fluctuates by 1%, the profit and loss will be 1% of the position × 10 = ±10U; if the price reverses and fluctuates by 10%, it will trigger a liquidation.
Plan B: 20x leverage: If the market price fluctuates by 1%, the profit and loss will be the position's 1% × 20 = ±20U. A price reverse fluctuation of only 5% will lead to liquidation.