Margin Trading pertains to the practice of trading wherein a trader makes use of funds that a broker had lent for the trading of a cryptocurrency. This forms the collateral for the loan.
Inexperienced traders are especially at risk as they are at a receiving end of a margin call in the event that the market moves in the opposite direction of their trades. There are two kinds of Margin Positions pertinent to Margin Trading.
1. Margin Bear Position
This type of margin position is taken by traders who go “short” on margin.
2. Margin Bull Position
This position is taken by traders who go “long” on margin.