Introduction to Margin Trading?
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In margin trading, users can borrow from a third party to make trades. An advantage of margin accounts over other regular trading accounts is that the former provides traders access to more capital by using leverage. In essence, the trading performance is scaled up in margin trading, meaning traders' gains are multiplied in profitable trades. As a widely used tool, margin trading can be seen in stock, commodity, and cryptocurrency markets.
Although, the trade-off behind the profit enlargement effect in margin spot trading is that traders would have to bear the risk of larger losses.
Huobi's margin trading is derived from spot trading. Here at Huobi, users can use leverage in margin trading to scale up their funds, thereby amplifying the profits at the cost of assuming the corresponding risks.
Here are the 4 simple steps to complete margin trades:
1. Transfer assets
Transfer assets to your Margin account
2. Apply for a margin loan
The borrow size is based on your principal and your desirable leverage
3. Set up your order
Fill out the details for your margin trading order
4. Repay principal and interests
Repay the borrowed assets and the accrued interests