Hi everyone! I am very very new to futures trading and have several questions regarding margins, repayments and etc. Some of these questions may sound dumb, but please consider that I am just starting 🙂
1) When I am trading futures it allows me to leverage up to say 2x just for the sake of simplicity? So for example if I have 20 usdt available on my futures USD M account and if I use that 2x leverage, binance will allow me to buy/long 40$ worth of ADA (just an example) at price of 2$/ADA is that correct?
2) Binance will give me a liquidation price of say 1$. So if the price of ADA drops to 1$ I will automatically get liquidated right? If so my main question now is, how much of my balance will get liquidated? Will I loose the 20$ that I had deposited in my futures account only, or will I also loose another 20$ worth of crypto from my other wallets (spot, margin, earn), to refund that 2x leverage that I used to buy 40$ worth of ADA?
3) If I wont loose anymore money, meaning if I only lose that first deposited 20 usdt deposited in my futures account, how will I repay that 2x leverage that I used to buy 40$ worth of ADA? If I don’t need to repay anything and just lose 20 usdt and thats it, then where is the catch?
I would highly appreciate any help. Thanks a lot in advance!