Bitcoin Margin Trading

Author: nicolas tang

margin trading

What is margin?

A (Bitcoin) margin trading account is a stock trading account that allows you to invest more money that what they actually own, which means you basically issue debt.

Let’s make an example:

You have $100 and then you invest the other $100 in dept also in that stock. So, you have $200 invested, but only $100 is actually yours because the other $100 is just debt. If the stock goes down to 50%, you will lose all your money. This is because it goes down to $100, but remember that the brokerage is the one that always gets their money first, so $100 left if their money.

What is that stocks double?

You will have $400, of which $300 is your and $100 is the dept money. This is the power of margin trading, where you can make much more money compared to regular trading.

What is margin account?

A regular margin account you cannot do day trading, the reason being is that trading needs three days to close. So you need to way that stock to close before you invest in another stock. But a margin account account skip all that, with it you can trade and you can be on margin. However, you are not on margin because you do not invest more than what your account has. If you are a day trader, it is fundamental for you have a margin account.

What is margin trading?

Margin trading often means day trading and have money in that balance. On margin trading, you have to pay interests in whatever you have loaned out. The amount of interest you have, depends on how much you take out for a loan and how much you have in your account balance.

 

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