Crypto margin trading lets an eligible trader borrow funds or gain exposure larger than deposited capital. It magnifies both gains and losses and can lead to liquidation. Availability, leverage limits and rules depend on the product and jurisdiction.
Collateral and borrowed exposure
Collateral supports the position and absorbs losses. If a trader opens $2,000 of exposure with $1,000 of their own eligible collateral, the position has effective leverage. A 10% market move affects the larger exposure, not only the initial contribution.
Initial and maintenance margin
Initial margin is the amount required to open a position. Maintenance margin is the minimum equity needed to keep it open. When account equity approaches the required level, the platform may request additional funds or liquidate positions automatically according to its rules.
Liquidation is not a planned stop
Liquidation is a risk-control process for the trading venue, not a trader’s preferred exit. Fees, market movement and slippage can create a worse result than closing earlier. The displayed liquidation estimate may change with fees, collateral value and other account positions.
Borrowing costs matter
Margin positions can incur interest, rollover charges or product-specific fees. A correct directional view may still lose money if held long enough at a high borrowing cost. Review the current schedule and calculate the break-even move before opening a position.
Cross versus isolated margin
- Isolated margin: limits assigned collateral to a specific position or market.
- Cross margin: uses broader eligible account equity, which can improve flexibility but expose more funds.
Terminology and mechanics vary, so never assume settings match another exchange.
Risk controls before trading
Use the lowest exposure necessary, define a maximum loss, understand stop behavior and leave a buffer above maintenance requirements. Avoid using essential funds or borrowing externally to provide collateral. Correlated positions can create more combined risk than their individual sizes suggest.
Margin is an advanced tool, not a shortcut to higher returns. Traders who cannot explain liquidation, collateral valuation and total holding costs should remain with unleveraged spot trading while learning the mechanics.