Margin Trading Crypto Explained

Author: nicolas tang

margn trading

What is MT in Crypto?

Margin refers to the loan your crypto exchange offers you to place larger trades. This loan is collateralize by the funds in your account and you will need to pay it back with interest. Margin trading with cryptocurrency allows users to borrow money against their current funds to trade cryptocurrency “on margin” on an exchange. In other words, users can leverage their existing cryptocurrency or dollars by borrowing funds to increase their buying power

Where to margin trade: you can trade it on Phemex.

How margin trading cryptocurrency works: Leveraging

The with introduction covered, let’s cover some of what we touched on above in detail.

So, it is in simple terms just borrowing funds to leverage your bet. You take extra risk for the chance of extra reward. Logically, this is something you primarily want to do when you think the odds are in your favor.

How does it work?

You have to have enough funds to cover the bet you are taking. If you don’t have the funds, your position will automatically be closed, “liquidated” or “called in.” As, although the lender will let you use their money for a fee to margin trade, any money lost and any fees paid will come out of your funds.

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