Glossary

Definitions & explanations of terms associated with cryptocurrency trading.

Glossary > Margin Trading
Margin Trading

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.