Risk & safety
Can you lose more than you invest?
In spot trading, no. Buying a token with your own funds caps your loss at exactly what you spent: the token can go to zero and stop there, and nobody can ask you for more. That changes entirely with leverage or perpetual futures, where a position can be liquidated and, in some venues, leave a negative balance.
Spot
You swap SOL for a token. The token goes to zero. You have lost the SOL you spent and nothing more. There is no margin call, no debt and no counterparty with a claim on you. This is why spot trading is where anybody learning should stay.
Leverage and perpetuals
- A leveraged position can be liquidated, which closes it at a loss you did not choose to take.
- In fast markets, liquidation can happen past your entry collateral, which is where a negative balance becomes possible.
- Funding costs accrue continuously, so a position can bleed while the price does nothing.
The practical caveats on spot
Two ways to lose more than the position without any leverage at all: signing a malicious approval that gives away tokens you still hold elsewhere, and letting a losing position pull you into revenge trades that cost more than the original. Neither is the market taking more than you put in, but the balance is just as gone.
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