> For the complete documentation index, see [llms.txt](https://docs.zofinance.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.zofinance.io/educational-resources/using-leverage-wisely.md).

# Using Leverage Wisely

Leverage multiplies your exposure — and your risk. Here’s how different levels of leverage impact your position size and the risk of liquidation:

📊 Leverage vs. Position Size

| Leverage | Capital at Risk | Max Position Size | Liquidation Risk |
| -------- | --------------- | ----------------- | ---------------- |
| 1x       | $1,000          | $1,000            | Low              |
| 5x       | $1,000          | $5,000            | Moderate         |
| 10x      | $1,000          | $10,000           | High             |

<figure><img src="https://4240345497-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FWPFvIGwhGu6StbcPdpCB%2Fuploads%2FghYm6rU1wmFxhSXlFbZZ%2FLeverage%20vs%20Position%20Size%20and%20Liquidation%20Risk.png?alt=media&amp;token=70387c2a-8c23-47ee-abfb-18a8347a6342" alt=""><figcaption></figcaption></figure>

Liquidation occurs when your margin drops below maintenance levels.