Looking at others getting rich through leverage, are you also tempted? I have to be honest—this comes with risks far greater than you think.

Perpetual contracts are essentially futures without an expiration date. Traditional futures require settlement at a set time, but perpetual contracts can be held as long as you want, as long as your account has funds.

What stabilizes the price? The answer is funding rates. Every 8 hours, longs and shorts transfer funds between each other. When the contract price surges, traders with long positions pay those with short positions; the reverse is also true. This mechanism acts like an automatic valve, preventing the contract price from drifting too far from the spot price.

Then there's leverage, which is a double-edged sword. Using 500 yuan as margin to open a 10x leverage position allows you to control a 5000 yuan Bitcoin position. If Bitcoin rises by 10%, you make a killing; if it drops by 10%, your 500 yuan is wiped out instantly.

Some platforms are going crazy now, offering leverage up to 100x. Imagine this: just a 1% move in the opposite direction and your capital is gone. This kind of risk is not something everyone can handle.

There's also a choice between cross margin and isolated margin. Cross margin uses all the funds in your account as collateral; if one position liquidates, the entire account could be wiped out. Isolated margin is more conservative—each position has its own collateral, so the maximum loss is limited to that position’s margin.

In short, behind the allure of high returns is playing with fire using your principal. You need to understand your risk tolerance and not be blinded by the dream of "small investment, big gains."