Crypto Glossary

Margin Trading

A practice where a trader uses borrowed funds from a broker to trade a cryptocurrency.

What Is Margin Trading?

Margin trading can be relatively risky for inexperienced traders who may receive a margin call if the market moves in the opposite direction of their trades.

Margin Bear is the name of the position a trader takes when going “short” on margin.

Conversely, margin bull is the name of the position a trader takes when going long on margin.

Margin trading enables cryptocurrency traders to take much bigger positions and buy bigger amounts of cryptocurrencies that would have not been possible in the absence of margin trading.

Traders who wish to trade with margin require a margin account.

Trading under normal circumstances requires a regular cash account.

Margin amounts vary. A trader can borrow as little as 10% of the cryptocurrency position or more.

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