What and How to Use Leverage in KuCoin Futures Paper Trading?

KuCoin Futures has optimized its leverage feature in the paper trading environment. In the new version, the leverage of the order and the position will be the same. Leverage will also be consistent for all positions and orders in the same contract. In this tutorial, we will further introduce leverage in the new version of KuCoin Futures.

1. What does the new version of leverage look like?

After the user opens a position, the actual leverage will always remain consistent with the manually configured leverage. The leverage will no longer change with the unrealized PNL of the position. This means that there is no longer an “actual leverage” for positions that change in real time. The leverage will not change unless manually adjusted by the user.

The size of the leverage determines the initial margin rate and the maintenance margin rate corresponding to the risk limit, both of which also determine the minimum amount of capital required by the user to open and maintain a position.

2. How do I adjust my leverage?

In the new version of KuCoin Futures, we can adjust the leverage in the order placement panel.

Head to the Place Order panel and click on the green bubble indicating the leverage. Enter the leverage or drag the dot to adjust it.

Note:

• Different leverage corresponds to different risk limits. When adjusting the leverage, you can refer to the corresponding risk limit.
• You can also choose to enable the Auto Deposit Margin. Once enabled, when liquidation is about to occur, KuCoin Futures will automatically withdraw the required margin amount from the available balance and add it to the position to avoid liquidation.
• Risk: If the Auto Deposit Margin is enabled, you may lose more than the original margin.

3. What happens when the leverage is adjusted?

When the leverage is adjusted, the leverage multiple, risk limit, and margin for the current contract order will also be modified.

a) Influence on position leverage and orders: The leverage of both positions and orders will be controlled.

If a user opens a position, then adjusts its leverage, both the leverage of the current position and the existing orders of the current contract will be adjusted.

Example: If user A opens a position in the LINK PERP/USDT contract and adjusts the leverage from 5x to 10x, the leverage of the position will become 10x, and the leverage of existing orders in the LINK PERP/USDT contract will also be adjusted to 10x.

b) Influence on the risk limit level: The limit level of the order placement will be influenced. The lower the available leverage, the higher the limit. Users may refer to What is the Risk Limit Level on KuCoin Futures for more details.

When a user places an order, KuCoin Futures will calculate the corresponding risk limit level based on the selected leverage. If the value of the current position and other orders of the same side exceeds the risk limit corresponding to the current leverage, the order cannot be placed.

The user can adjust the risk limit level by adjusting the leverage and can place orders by reducing the number of orders so that the overall position value is within the risk limit.

c) Influence on margin: When adjusting the leverage, the margin for both the positions and the orders will also be updated.

• When the leverage is raised, the margin of the positions and orders are reduced, releasing a certain amount of occupied margin.
• When the leverage is reduced, the margin of the positions and orders will increase, raising the occupied margin.

4. Notes

a. Adjustment of leverage: Can be performed from the Place Order panel either when placing orders or holding positions.

b. Maximum leverage: This corresponds to your identity verification level and the maximum leverage supported by the corresponding contract. Higher leverage will increase the risk of holding a position. Newbies are advised to control leverage within 5x or less.

c. Maintenance margin rate of the position: Determined by the level where the actual position value is located. If a change in the risk limit level occurs when modifying positions, the maintenance margin rate may be updated, affecting the liquidation price.

d. Leverage multiples: Only integer multiples of leverage are supported, no more leverage with decimal points.