Margin trading in crypto refers to the practice of using borrowed funds from a broker to trade a cryptocurrency, allowing for greater purchasing power and potential for increased gains or amplified losses.

Understanding Margin Trading in Crypto

Margin trading is a strategy that involves trading assets using funds provided by a third party. In the crypto world, this means a trader can open a larger position than their account balance would typically permit.

How Margin Trading Works

Margin Trading Example

With $200 and 10x leverage, you can open a $2000 position. If the market rises by 10%, you double your initial investment. If it falls by 10%, you could lose your entire stake and face liquidation.

Risks Involved in Margin Trading