Margin Trading

Margin trading in cryptocurrency refers to the practice of borrowing funds from an exchange or broker to trade larger positions than the trader's actual capital. It allows traders to leverage their positions, potentially amplifying both gains and losses. For example, if a trader uses 10x leverage, they can control a position 10 times the size of their initial investment. However, if the trade moves against them, losses can accumulate quickly, leading to a margin call where the exchange may liquidate the trader's position to recover the loaned funds. Margin trading is typically considered high-risk and is recommended for experienced traders.