Margin Trading - Page 3

Margin trading is a method of trading cryptocurrencies using borrowed funds from a broker or exchange to increase potential returns. Traders deposit collateral, known as margin, and can open positions larger than their account balance. This allows for amplified profits but also increases the risk of significant losses. Exchanges typically charge interest on borrowed funds and may enforce liquidation if positions fall below required maintenance margins. Margin trading is often used for short-term speculation or hedging strategies.