Margin trading is a method of trading the financial market using funds borrowed from your trading platform which exceed the total amount of trading capital you hold. The funds provided by the third party can boost your funds and support your trade ideas, allowing you to maximize your profits from promising opportunities.
In the world of cryptocurrencies, several leading crypto exchanges offer margin trading services by paying extra fees. You can borrow funds from your exchange to generate higher profits on winning trade ideas. However, we recommend you use this option only after gaining expertise in trading cryptos, as it could also maximize losses if your trade idea falters.
Some exchanges also use the term leveraged trading to refer to margin trading, as this technique lets you leverage up or boost your trading capital. To limit potential risk in margin trading, some platforms automatically close your open margin trading positions when the market reaches the liquidation price of an asset. Such a strategy could contain your losses to prevent severe losses.
