Can I lose more money than I invested when trading derivatives?

Yes, with leveraged derivatives like futures and options, you can lose more than your initial investment. This happens through liquidation—when your position loses value rapidly and your broker automatically closes it to prevent further losses. For example, if you use 10x leverage with $1,000, a 10% price move against you eliminates your entire investment, but a 15% move means you owe money. Most exchanges require margin (collateral), and when it drops below maintenance levels, liquidation occurs automatically. Beginners should start with small positions, understand leverage limits, use stop-losses, and never risk capital they can't afford to lose. Spot trading (buying coins outright) limits losses to your investment amount, making it safer for inexperienced traders.