Margin Trading (Margin)

Margin trading involves using borrowed funds from a broker or exchange to trade financial assets with leverage. Leverage ratios can range from 2 to 150 times the collateral. However, higher leverage increases the risk of margin trading liquidation. If a trade moves against the trader’s position, the collateral may be liquidated, resulting in the loss of the entire initial investment. Margin trading is considered high risk and is generally not recommended for inexperienced traders.