What leverage means here
On a perp, leverage is how much you borrow, and it comes with a price at which you get wiped out. On Isometric there is no borrowing and no liquidation. Leverage does two things: it sets how big your position is, and how far away your target sits.
Leverage sets position size
Your position size is your budget times the leverage. It is also the most the position can ever pay.
| Budget | Leverage | Position size and maximum payout |
| $500 | 5x | $2,500 |
| $500 | 10x | $5,000 |
| $500 | 25x | $12,500 |
| $500 | 50x | $25,000 |
| $500 | 100x | $50,000 |
Leverage moves your target
A bigger payout for the same money means more risk. Higher leverage pushes your Worthless at or below and Profit above prices further from today's price. Lower leverage brings them closer.
Two seven-day Bitcoin longs, $500 either way:
| Leverage | Position size and maximum payout | Worthless at or below | Profit above |
| 50x | $25,000 | $80,796 | $82,412 |
| 100x | $50,000 | $83,254 | $84,086 |
Twice the leverage, twice the maximum payout, and both prices sit further away. That is the trade at every tier: more per 1% of the move, a target further out, and a lower chance of reaching it.
| Leverage | Where the target sits | How often it pays | Payout per 1% past target |
| 5x | Closest to today's price | Most of the time | 5% of what you paid |
| 10x | A little further | Often | 10% |
| 25x | Further | Sometimes | 25% |
| 50x | Further still | Less often | 50% |
| 100x | Furthest out | Rarely | 100% |
At low leverage the target can sit below today's price, so you are paid unless the market moves against you. At high leverage it sits above, so most positions expire worthless, and the ones that pay return many times what you put in.
The exact distances move with the market. When the market is calm the targets sit closer. When it is volatile they sit further away, because a big move is more likely and the pool prices it in.
Leverage does not create a liquidation price
Nothing happens to your position while it is open. If a 50x long goes 10% against you on day two and recovers on day six, it pays in full on day seven. A perp at the same leverage would have been closed out on day two.
The cost of that protection is already inside what you paid. There is no margin to top up and no funding to pay.
Breakeven and the cap
- Low leverage needs a bigger move to break even. Each 1% past your worthless price pays back leverage percent of what you paid. At 100x, a 1% move returns your money. At 5x, you need 20%.
- The payout is capped at position size. A long hits the cap if the price doubles from its worthless price. A short hits it if the price falls to zero. Neither is likely, but the cap is there.
Choosing a leverage
Ask where you think the price will be at settlement, not how much you want to win.
- If you think it will drift your way or hold, pick low leverage. You will be paid most of the time.
- If you think it will move decisively, pick high leverage. Each 1% of the move pays more.
- If you are not sure, the middle tiers split the difference.
The ticket shows exactly where each tier puts the target. Move the slider and watch the worthless price and profit price shift before you decide.