Margin is the amount of collateral you have to give the broker in exchange for buying (X) contracts
Leverage is the ratio of margin to actual contracts bought
500 contracts is 500 contracts. Doesn't matter how much margin you gave the broker in order to get that position size, it's still 500 contracts
At no leverage, if each contract is $1, the cost is $500. At 10x leverage, the cost is $50, but you still end up with 500 contracts
The intended use of margin and leverage is to reduce the amount held on an exchange, which is less secure than cold storage, not so you can trade with more than you own
People get rekt with leverage when they: don't use proper risk management strategies, use leverage to trade with more than they own, suck at trading in general
Bitmex and many other leverage trading sites entice you to use them by displaying unrealized profits as a % of your margin, not your position size/contract amount
So if you use 10x leverage to buy 500 contracts, it looks like you made 10x as much %-wise as the guy who bought 500 contracts worth no leverage. You actually made the exact same amount, one of you just paid less for it
But this entices gamblers and adrenaline junkie risk-takers to the platform
Cross-margin uses your entire account balance as potential margin, and auto-adjusts it based on how far in the green or red you are. People trading on cross margin always have huge % gains or losses displayed, because they are usually on high leverage
This is because their margin requirement is low when in profit, and only changes when tehy are in the negative. That guy posting +340% on a tiny move isn't showing you when his account says -190%
Hopefully this clears up some of the misconceptions around margin trading, especially those less familiar with it. It is a useful tool, and when used correctly is no more dangerous than spot trading. Most just don't know how to use it, and/ or like to show off to the uninformed.
Tread lightly my friends.