Leverage and position limit
It's a prudent risk management mechanism that aims to mitigate the potential for significant losses by adjusting the maximum available leverage based on the trader's position value. By lowering the maximum leverage for larger positions and vice versa, the system helps to control the overall risk exposure of individual traders, especially in volatile market conditions. This dynamic approach to leverage strikes a balance between providing traders with flexibility and managing systemic risk. It's a valuable safeguard that promotes responsible trading practices and contributes to the overall stability of the trading ecosystem.
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