What is Margin Trading (Margin)?

Margin trading refers to the process of using borrowed funds from a broker or exchange to trade a financial asset through a leveraged position. This leverage can vary widely, from 2 – 150 times your collateral. The higher the leverage used, the higher the margin trading liquidation risk. If a trade goes against a trader (i.e. the wrong direction), it can result in the permanent loss of the entire initial position as the trader's collateral is liquidated. Margin trading is not recommended for inexperienced traders due to its higher risk profile and potential for large financial losses.