Myth: higher leverage means a bigger position.

It changes how much margin the position ties up, and it moves your liquidation price, but it does not change what the stop costs. This guide sizes a LINK short on BYDFi to show the difference, using contract data from 10:16 AM ET today.

The screenshot is the live BYDFi LINKUSDT perpetual page at 10:17 AM ET: last 10.909, down 8.77%, index 10.913, fair price 10.909, funding +0.0100% with 01:42:38 left on the countdown, 24h high 12.009 and low 10.290, the Perpetual 300x tag, and a 15m chart. The worked numbers use the 10:16 last price of 10.928.

The setup

A 1,000 USDT account, a short at 10.928, a stop at 11.47, and 1.5% of equity at risk, which is 15 USDT. The stop distance is 0.542 per LINK, about 4.96% of entry. LINK_USDT contracts are 0.1 LINK each with a 1 contract minimum. BYDFi charges 0.06% taker and 0.02% maker, calculated as trade size x price x rate.

Step by step

1. Risk per LINK from price: 11.47 - 10.928 = 0.542.
2. Risk per LINK from fees, entering and exiting at taker: 0.06% x 10.928 + 0.06% x 11.47 = 0.0134.
3. Total risk per LINK: 0.542 + 0.0134 = 0.5554.
4. Size: 15 / 0.5554 = 27.006 LINK.
5. Contracts: 27.006 / 0.1 = 270.06, rounded down to 270, so 27 LINK, about 295.06 USDT of position value.
6. Check: 27 x 0.542 = 14.63 price loss, plus about 0.36 fees, 14.997 USDT. Inside the 15.

Without steps 2 and 3, the raw math gives 276 contracts (27.6 LINK) and a loss of about 15.33 at the stop.

Where leverage actually shows up

BYDFi's margin page gives initial margin as quantity x entry price / leverage. For 27 LINK at 10.928 that is 59.01 USDT at 5x, 29.51 at 10x, 5.90 at 50x and 0.98 at 300x. Every one of those loses 14.997 at the stop.

Leverage matters for liquidation. Maintenance margin is the maintenance rate x position value, minus a quick-calculation amount, and LINK's first tier rate is 0.165%. At 50x, initial margin is 2% of value, so liquidation is roughly 1.8% away, far inside a 4.96% stop. At 10x the room is close to 9.8%, behind the stop. That is the real job of the leverage setting: keep liquidation further away than the stop.

BYDFi also shows an opening cost, which is initial margin plus any open loss from the gap between your order price and the fair price. That is what leaves the available balance at entry. It is not your risk.

Why the stop is this wide

LINK's 24h range was 10.29 to 12.009, about 15.7% of the price. A 1% stop on a coin moving like that is mostly noise. The wider stop is fine because the size shrank to match it. The risk stayed at 15 USDT.

Funding on a short

Funding is 0.01% every 8 hours on position value. While positive, longs pay shorts, so this short would receive about 0.03 USDT per settlement on 295.06 USDT. It can flip negative, and then the short pays.

Common mistakes

• Treating the 300x cap as a target. On this trade it puts liquidation almost on top of entry.
• Sizing from available balance instead of from the stop.
• Counting only the opening fee. The stop exit is a taker fill too.
• Rounding 270.06 contracts up.
• Copying the same size to BTC, ETH, SOL or XRP perps. Contract sizes and volatility differ, so redo steps 1 to 6.

Short FAQ

Is 1.5% a recommendation? No, it is an example input. The method works with any budget.

Does a limit entry change things? At 0.02% maker, step 2 shrinks a little and the size grows a little.

What if price jumps past 11.47? A stop-market exit fills at the next available price, so the loss can exceed the plan. Smaller size limits how much.

What risk percentage do you use per trade, and do you fold fees into it before you pick the size?