Margin trading is a method of trading cryptocurrencies using funds provided by a third party; compared to spot or regular trading, a margin account allows traders to trade with a larger sum of capital and adjust leverage to their positions. This way, traders can have a chance of earning more profits than usual on successful trades. But with greater chances of profits comes greater chances of loss.
In traditional markets, the margin funds are usually provided by institutional investors in return for interests; however, in the cryptocurrency market, these funds are provided by other traders who earn interest based on market demand.