> ## Documentation Index
> Fetch the complete documentation index at: https://docs.sporttoken.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Leverage

# Leverage Trading

Leverage lets you open a larger position using a smaller upfront collateral amount. That increases both your upside and your downside.

## What leverage means

If you choose a leverage multiplier, your position is scaled relative to the collateral you post.

* **Higher leverage** can increase your payout if your side wins
* **Higher leverage** also makes liquidation happen faster if the market moves against you

## Key terms

### Collateral Amount

Collateral is the amount you are putting up to open the leveraged position.

### Entry Odds

Entry odds are the odds used when your leveraged position is opened.

### Liquidation

Liquidation is the adverse odds point where your leveraged position is automatically closed.

This can happen before the game settles if the mark moves far enough against you.

### Max Payout

Max payout is the total amount returned if your position wins and is not liquidated. This includes your original collateral.

## Why leverage is riskier

Leverage increases sensitivity to price movement.

With a normal bet, you usually only care about the final result. With leverage, you also care about what happens *before* the final result, because a bad enough move can liquidate the position early.

## Example scenario

Here is a simple example to show how a leveraged position can behave:

* You choose **Team A moneyline at -120**
* You post **\$10 of collateral**
* You choose **4x leverage**
* Your nominal position is **\$40**
* If that **\$40** position drops to **\$30** at any point before settlement, it is liquidated and closed

You only posted \$10 upfront, but the 4x multiplier gives you exposure as if the position were \$40.

### If the trade goes well

If Team A wins and your position is not liquidated, your payout is based on the leveraged position size, not just the original \$10 collateral.

That means your upside is larger than a normal \$10 bet.

### If the market moves against you

Now imagine the market moves against your side before the game ends.

Because you posted \$10 and are using 4x leverage, you only have \$10 of room before your collateral is fully wiped out.

So if the nominal \$40 position drops to \$30 at any point before settlement, it is liquidated and the trade is closed.

That means:

* you do **not** get to wait for the final score
* the position is closed once the liquidation level is reached
* higher leverage makes this happen faster

### Why this example matters

With a regular bet, you mostly care about whether Team A wins the game.

With a leveraged position, you care about **both**:

1. whether Team A wins
2. whether the market moves against you enough to liquidate the position before then

So even if you still like your side long term, a sharp enough short-term move can still close the trade early.

## Important reminder

Leverage trading involves large risk. If you are unsure about the liquidation level, lower the multiplier or use a regular bet instead.