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## Margin at Cryptoexchanges

A margin is required to be able to leverage a trade.**Margin Trading**: You are allowed to use coins from peer-to-peer margin funding providers. This means, that **you can borrow buying/selling power**, but you need to allocate some funds (=margin) which won’t be accessible until you return the lent coins.

Let us make a 10:1 leverage example.

Let the Bitcoin price be $500.

Let us assume that you only have 500 USD but you want to buy 10 BTC. This is possible, but you will have to pay an interest for borrowing $5000 after you close your position. For example, the BTC closes at $550.

So you have made $500 or a 100% earnings for only a 10% price increase. From this earnings, you will only need to subtract the interest rate (about 2%) and you have your final profit/loss, which is higher if you predicted the course of the trade correctly.

Never forget, that if in the same example the Bitcoin price would have fallen to below $450, then the crypto exchange would have liquidated your position and your account value would be zero.

It is also possible to employ margin trading with a vast number of brokers that offer CFD trading on the Bitcoin and other cryptocurrencies.

According to InsideBitcoin’s crypto trading guide found here, it is possible to go both long and short as well as access the leverage of 20:1 with such brokers as eToro. Next to this, the platform is available for both EU and US traders and provides a platform full of useful features, the main one being the Copy Trading.