Margin trading

Margin trading is trading with funds borrowed from an exchange or other traders, using your own assets as collateral, called margin. It lets you open larger positions, or go short by borrowing and selling a coin you expect to fall.

Exchanges set an initial margin, the collateral you need to open a position, and a maintenance margin, the minimum you must keep to avoid liquidation. If losses push your margin below the maintenance level, you may receive a margin call and the exchange will close your position automatically.

Many platforms offer two modes. With isolated margin, only the collateral assigned to a particular position is at risk. With cross margin, your whole account balance backs every position, which can delay liquidation but means one bad trade can drain everything. You also pay interest on borrowed funds, usually charged hourly or daily. Margin amplifies both gains and losses, so it is best avoided by beginners.