STRATEGIES
Margin Trading
Definition
Margin trading involves borrowing funds to trade larger positions than your account balance allows. Traders post collateral and can be liquidated if positions move against them significantly.
Example
Example
You deposit $1000 ETH as collateral and borrow $2000 USDC to buy more ETH, creating a leveraged long position that can be liquidated if ETH drops.
Risks to Consider
Risks
- Liquidation risk
- Interest payments
- Margin calls
- Enhanced volatility exposure