9 Best Crypto Margin Trading Exchanges in 2024

best crypto Margin Trading exchanges

Margin trading lets you put more money to work, multiplying your earnings if you correctly predict the market’s direction. Combined with futures contracts, margin is also often useful for hedging if you want to protect your downside while holding a core position. But which are the best crypto margin trading exchanges, and which cryptos can you trade?

In this guide, we’ll review the best crypto margin trading platforms, comparing features and tradable cryptos as well as the pros and cons of each exchange. Let’s get started.

The 9 Best Cryptocurrency Margin Trading Platforms Ranked

We ranked the best crypto Margin Trading exchanges, weighing factors such as trading fees, available leverage ratios, and tradable cryptos.

  1. MEXC: Our pick for the best overall margin trading exchange. Trade with up to 200x leverage or choose from over 1,000 cryptocurrencies for spot trades. Futures trading fees start at 0.0%.
  2. OKX: Trade spot Bitcoin and other cryptos with up to 10x leverage or 100x with 200+ trading pairs for futures markets.
  3. Binance: Margin trading from 5x for spot markets to 125x for futures markets. More than 300 trading pairs are available for contracts.
  4. PrimeXBT – Apply up to 100x leverage when trading Bitcoin futures. Leverage Copytrading tools and enter trading contests.
  5. Coinbase: The Coinbase exchange returns to the margin market with designed-for-safety 5x margin levels for BTC and ETH trading.
  6. Kraken: Qualified traders can trade with margin or perpetual contracts. Choose from 95 contracts with 50x leverage.
  7. Bybit: The Bybit exchange offers crypto margin trading with up to 100x leverage, combined with a feature-rich platform.
  8. Kucoin: Trade over 800 cryptos or choose from over 250 futures contracts with up to 125x leverage available.
  9. Phemex: A clean UI meets a powerful trading platform. Trade with 5x on spot markets or up to 100x on over 200 futures contracts.

Reviewing the Top 9 Bitcoin Margin Trading Exchanges

Bitcoin is the top traded crypto asset globally, with monthly BTC futures volume – boosted by margin – often outpacing the entire spot trading market at the leading exchanges by 50%. Bitcoin Margin trading platforms offer a way to trade BTC with leverage, typically alongside other popular cryptocurrencies like ETH.

Note: Some platforms may not support margin trading in specific markets, such as the US, UK, or Canada, due to regulatory restrictions.

1. MEXC – Our Pick for the Best Overall Margin Trading Exchange

Available in more than 170 countries, MEXC now serves more than 10 million users globally. The exchange launched in 2018 with the goal of making crypto trading user-friendly.

MEXC crypto exchange

Bitcoin margin trading is available through perpetual futures contracts that don’t have an expiration date. Settlement options include Tether (USDT) or BTC, depending on the contract you choose. Other Coin-settled contracts include popular assets like ETH, XRP, and ADA (six choices in total). Choices for USDT-settled contracts reach well over 100, including BTC and ETH, as well as hot trading names like IOTA, SOL, and PEPE.

MEXC margin trading with futures lets you trade with up to 200x leverage – or with no leverage at all. Fine-tune your trade with stop losses or take profit orders that trigger at levels you define.

mexc margin trade btc futures

The exchange also offers a $50,000 USDT demo account to test trading strategies or learn your way around the platform. Other features include copy trading, crypto loans, and MXC Savings, a way to earn a yield on popular cryptocurrencies.

Trading fees are as low as 0.0% for limit orders and 0.02% for market orders, making MEXC a cost-effective platform for margin-trading BTC and other assets. Low fees and a huge selection of futures contracts make MEXC the best crypto margin trading platform for many traders.

Pros

  • Wide leverage options of up to 200x
  • ~200 perpetual futures markets
  • Demo account for futures

Cons

  • US not supported for cash deposits
Number of cryptos (spot) 1000+
Max leverage Up to 10x spot margin, up to 200x futures
Bitcoin trading fees
  • 0% maker fees (limit order)
  • 0.02% taker fees (market order)
Margin trade types Perpetual futures, Spot; availability varies by location

2. OKX- Margin Trading with up to 100x Leverage and a Demo Account

With 20 million users in over 100 countries, OKX has risen through the crypto exchange ranks since its founding in 2017. Powerful trading tools, including a demo account and trading bots, make OKX one of the best margin trading crypto exchanges.

okx cryptocurrency exchange

Test trading strategies or learn OKX’s features using a no-risk demo account. When you’re ready to trade with leverage, the platform supports up to 10x leverage for spot market trades and up to 100x leverage for traditional futures with an expiry date or perpetual futures contracts that never expire.

Traditional futures are available for BTC and ETH, whereas perpetual futures trading brings nearly 200 choices, including BTC and ETH as well as lesser-known assets like RDNT and LOOKS.

Trading fees for futures on OKX are affordable at 0.02% for limit orders and 0.05% for market orders. Fees vary by trade type, however, with spot market fees ranging from 0.05% to 0.07%.

OKX also offers a wide selection of trading bots. You can use pre-programmed bots to trade on your behalf day or night – with or without leverage.

okx margin trade btc

Use one of OKX’s pre-built bots or design your own.

For hedging your bets, OKX provides simple-to-use options as well.

Pros

  • Full-featured demo account
  • Margin trading for spot trades
  • ~200 perpetual contracts

Cons

  • Not available in the US or Canada
Number of cryptos (spot) 350+
Max leverage Up to 10x spot margin, up to 100x futures
Bitcoin trading fees
  • 0.02% maker fees (futures limit order)
  • 0.05% taker fees (futures market order)
Margin trade types Spot, futures, perpetual futures, trading bots

3. Binance – Margin Crypto Trading for Over 300 Trading Pairs With Low Fees

Binance is the largest crypto exchange in the world and is considered the best margin crypto exchange by many traders who seek high liquidity.

binance crypto exchange

You’ll find cross-margin of up to 5x within easy reach on spot trades. Futures markets give you the option to use up to 125x leverage. Choose from quarterly or perpetual contracts, with options for stablecoin settlement in USDT or BUSD – or contacts that settle in cryptocurrency like BTC.

Like OKX, Binance offers trading bots as well, so you can put your margin trading on autopilot, and they’re available right from the spot trading dashboard.

Binance trading platform charts

Over 300 available trading pairs for futures provide plenty of options, including margin trading Bitcoin, Ethereum, Solana, Ripple, and others. Binance’s spot market expands trading pairs to over 1,000, with more than 360 tradable cryptocurrencies.

Spot and margin trading fees come in at 0.1%, whether trading with limit orders or market orders. Trading fees for futures start at 0.012% for maker orders and 0.030% for taker orders. Volume discounts and discounts for paying fees with BNB (25% discount) bring trading costs down further.

Pros

  • High liquidity
  • Easy margin trading for spot trades
  • 25% fee discount if paid with BNB

Cons

  • Not available in the US or Canada
  • More complicated trading interface
Number of cryptos (spot) 350+
Max leverage Up to 5x spot margin, up to 125x futures
Bitcoin trading fees
  • 0.012% maker fees (futures limit order)
  • 0.030% taker fees (futures market order)
Margin trade types Spot, futures, perpetual futures, trading bots

4. PrimeXBT – Apply 100x Leverage on Bitcoin Futures and Pay Low Fees

Established in 2018, PrimeXBT is used by over 1 million registered traders across 150+ countries. This multi-faceted exchange allows investors to trade Bitcoin futures, access Copytrading tools, and participate in trading contests. 

PrimeXBT homepage

On PrimeXBT, investors can trade Bitcoin on margin. PrimeXBT allows investors to trade margin automatically – by simply selecting the ‘Buy’ or ‘Sell’ option. Once this is done, PrimeXBT sets aside your margin deposit on its own. By selecting the ‘Sell’ option, you can earn profits on Bitcoin even when the price decreases. 

When trading Bitcoin on margin, PrimeXBT charges a maker/taker fee of just 0.01%/0.02%. TO magnify your profits, you can apply up to 100x leverage. However, this may be suitable for traders with a higher risk appetite. 

Upon signing up, new investors can get a $100 bonus by depositing at least $500 within the first 48 hours of registration. Once your funds are transferred to one of the global trading accounts available on PrimeXBT, you will receive the $100 bonus. 

PrimeXBT offers innovative trading tools such as CopyTrading – allowing you to copy the exact crypto trades of other skilled investors on the platform. You can even win real prizes by taking part in trading contests using virtual funds. 

PrimeXBT BTC Futures chart

PrimeXBT is accessible via a desktop, and iOS and Android on your mobile phones. The platform offers a range of real-time market updates and access to advanced trading charts to support your trading journey. 

Pros

  • Low futures trading fees
  • Access Copytrading tools
  • Access up to 100x leverage when trading cryptos

Cons

  • Only offers Bitcoin futures
Number of cryptos (spot) 40+
Max leverage Up to 100x on Cryptos
Bitcoin trading fees
  • 0.01% maker fees (futures limit order)
  • 0.02% taker fees (futures market order)
Margin trade types Futures

5. Coinbase – Regulated Margin Trading for BTC and ETH

The world’s largest publicly traded crypto exchange quietly recently rolled out futures trading, although trading options vary by region. Coinbase international offers perpetual futures with up to 5x leverage, whereas Coinbase offers cash-settled quarterly futures contracts for BTC and ETH, again with up to 5 leverage.

To qualify in the US, you must certify that you earn at least $50,000 per year and have a $50,000+ net worth.

coinbase crypto exchange

Coinbase futures trading for international users offers a wider selection, letting traders choose from ten assets, including BTC and ETH, as well as XRP, LTC, LINK, and five others.

coinbase apply for futures trading

Introductory trading fees are 0% for maker (limit) orders and 0.03% for taker (market) orders. Expect trading fees of 0% to 0.06% for international futures traders thereafter.

Crypto trading with margin on Coinbase feels like home if you’re accustomed to Coinbase Advanced. However, the Coinbase mobile app – which supports advanced trades – does not support futures trading yet.

Pros

  • Integrated with Coinbase Advanced
  • US trading regulated by the CFTC
  • Added transparency as a public company

Cons

  • Certification process in the US
  • No margin for spot trades
Number of cryptos (spot) 250+
Max leverage Up to 5x
Bitcoin trading fees
  • 0.0% maker fees (futures limit order)
  • 0.06% taker fees (futures market order)
Margin trade types Traditional futures, perpetual futures; availability varies by location

6. Kraken – Security Focused Exchange with Futures Contract for 95 Cryptos

As one of the longest-running crypto exchanges, Kraken is also one of the most trusted crypto margin trading platforms. Like Coinbase, leverage limits are lower, just 3x for US traders on Kraken.

US traders must also certify that they are an Eligible Contract Participant (ECP), defined as someone with more than $10 million in discretionary investments.

kraken crypto exchange

While Kraken offers lower leverage than competitors, 3x leverage is much safer than high-leverage alternatives that can wipe out your margin in seconds.

Futures trading is no longer available in the US.

International users can trade any of 95 perpetual futures contracts on Kraken Pro, ranging from Aave to Bitcoin to Polkadot to ZCASH. Perpetual futures on Kraken offer margin trades with up to 50x leverage.

kraken pro trade btc margin

Fees vary depending on trade type. For example, spot trades with margin use Kraken’s standard fee schedule. Maker orders cost 0.16%, whereas taker orders cost 0.26%.

Fees are lower for futures trades, however, with 0.02% maker fees and 0.05% taker fees.

Pros

  • Easy-to-use trading platform
  • Low fees for spot and futures orders
  • Proof of reserves with liabilities

Cons

  • Certification process in the US
  • No futures available in the US
Number of cryptos (spot) 240+
Max leverage Up to 3x (spot), up to 50x futures
Bitcoin trading fees
  • 0.02% maker fees (futures limit order)
  • 0.05% taker fees (futures market order)
Margin trade types Spot, perpetual futures; availability varies by location

7. Bybit – Margin Trading With 100x Leverage and a Demo Account

In comparison to other exchanges, Bybit is a smaller platform, yet still rich with features, especially for margin trading crypto assets like BTC or ETH. The platform was founded in 2018 and now boasts over 2 million users attracted by tools like leveraged tokens, 100x leveraged trades, and low trading fees.

bybit crypto exchange

Similar to MEXC and OKX, Bybit also offers a demo account where you can learn to trade futures risk-free.

This Dubai-based exchange offers both traditional and perpetual futures as well as spot trading with 10x leverage. Futures trades expand leverage up to 100X for BTC and ETH and up to 50x for altcoins.

bybit margin trade btc

Bybit also offers leveraged tokens, an easy way to trade with leverage without risking margin assets. For example, Bybit’s BTC3S token lets you short the Bitcoin market using 3x leverage to triple your gains if the price of BTC falls. If the price of Bitcoin rises enough, however, the value of your position can go to zero.

Trading fees are competitive, with spot trading fees at 0.1% for both limit and market orders. Derivatives like futures come with lower trading fees of 0.020% for limit orders and 0.055% for market orders.

Pros

  • Ultra-fast trading platform
  • Leveraged tokens for easy trading
  • Up to 100x leverage on BTC and ETH

Cons

  • Not available in the US or Canada (restricted by IP address)
Number of cryptos (spot) 450+
Max leverage Up to 10x (spot), up to 100x futures
Bitcoin trading fees
  • 0.020% maker fees (futures limit order)
    0.055% taker fees (futures market order)
Margin trade types Spot, perpetual futures; availability varies by location

8. Kucoin – 125x Margin Trades for More Than 250 Cryptos

Like MEXC, Kucoin offers a massive selection of coins and tokens, with over 800 cryptos available for trading. The platform also offers nearly 250 futures contracts, allowing margin traders to apply up to 125x leverage on popular assets.

Access to certain platform features and max leverage required identity verification.

kucoin cryptocurrency exchange

Kucoin offers margin trading for spot trades with up to 10x leverage. Coin-settled contracts allow 50x margin trades on BTC, ETH, DOT, and XRP. Perpetual USD-margined contracts allow trading with up to 125x leverage on nearly 250 cryptocurrencies.

Other margin-related features of the platform include trading bots that can use leverage and leveraged tokens. kucoin margin trade BTC futures

Kucoin is known for low fees, with maker and taker fees at 0.1% for spot trades on popular “Class A” assets like BTC and ETH. Futures trading fees start at 0.02% for limit orders and 0.06% for market orders. Volume discounts apply and Kucoin also offers a discount for accounts that hold KCS, Kucoin’s own token.

Pros

  • 800+ cryptos for trading
  • Leveraged tokens for easy trading
  • Up to 125x leverage
  • 250+ tradable futures contracts

Cons

  • Limited functionality without identity verification
Number of cryptos (spot) 800+
Max leverage Up to 10x (spot), up to 125x futures
Bitcoin trading fees
  • 0.02% maker fees (futures limit order)
  • 0.06% taker fees (futures market order)
Margin trade types Spot, futures, perpetual futures; availability varies by location

9. Phemex – Trade 200+ Perpetual Contracts With  up to 100x Leverage

Launched in 2019, the Singapore-based Phemex exchange already competes with exchanges like Coinbase and Kraken in the number of cryptocurrencies available. The exchange offers nearly 240 tradable cryptos and several ways to trade with leverage.

phemex crypto exchange

Trade on spot markets with up to 5x leverage or trade futures contracts with up to 100x leverage. We found well over 200 available perpetual contracts, allowing trades in BTC, ETH, SOL, XRP, MATIC, and hundreds of other crypto assets.

phemex trade btc

Other features include mock trading, which acts like a demo account and lets you practice futures trades or test strategies without risk. Phemex also offers copy trading, which lets you follow the moves of profitable traders on the platform.

Similar to OKX and several others in our roundup, Phemex provides a selection of trading bots that use leverage to maximize returns as well.

Phemex offers a clean yet full-featured trading platform and helpful videos every step of the way. This support makes the exchange one of the best crypto margin trading platforms for beginners or those who trade less frequently.

Trading fees on Phemex remain competitive with similar exchanges. Spot fees are 0.1% for both limit and market orders, whereas contract fees are 0.01% for limit orders and 0.06% for market orders.

Pros

  • Mock trading for learning and testing
  • Copy trading
  • Up to 100x leverage on BTC and ETH
  • Newbie-friendly interface

Cons

  • Minimum withdrawals
Number of cryptos (spot) 235+
Max leverage Up to 5x (spot), up to 100x futures
Bitcoin trading fees
  • 0.01% maker fees (futures limit order)
  • 0.06% taker fees (futures market order)
Margin trade types Spot, perpetual futures; availability varies by location

What is Crypto Margin Trading?

Crypto margin trading refers to borrowing against your account balance to make larger trades. Another term for this trade type is called leverage trading. Much like using a long bar to lift a heavy object with less effort, leverage trading allows you to trade larger amounts with less capital.

The term margin refers to the assets you use as collateral for the trade. And because your margin is collateral, it’s also at risk if the market takes a different direction from your trade.

Margin trading in crypto can take several forms, however.

For example, you can use margin with spot trading, which means you’re trading the real asset with immediate settlement when you close the trade.

You can also trade with margin when using futures trades. Futures trading is a bet on the future price of the crypto asset and is available in the following contract types.

  • Delivery contracts: You’re trading the real asset at the contract price. On expiration, you buy (take delivery) or sell (deliver) the cryptocurrency at the contract price.
  • Perpetual contracts: Sometimes called perpetual swaps, perpetual contracts don’t expire and don’t require delivery. Instead, they use funding rates (interest rates) to keep the contract price close to the spot market price. You can close your position at any time.

Margin trading with futures can be useful for hedging against future market moves, although a more common use is to maximize trading profits. However, leverage works both ways, amplifying profits or losses. As a result, margin trades that lose money can lead to liquidation, in which the exchange sells your margined funds to cover the loss.

How Does Cryptocurrency Margin Trading Work?

Margin trading uses the funds in your trading account as collateral to borrow and make larger trades. With spot trading, in which you buy the real asset, the process is straightforward.

Here’s an example. You have $300 for trading.

If you think the price of Bitcoin will go up, you can buy just $300 worth of Bitcoin without borrowing. In this case you’re using 1x leverage, which is how some exchanges will label the option.

But if you want to double your exposure and potential profits, you can use 2x leverage. Exchanges usually offer a slider control to fine-tune your trade. With 2x leverage, you can buy $600 worth of Bitcoin, but you’ll owe $300 plus interest.

The initial $300 you put into the trade is your margin, and it’s used as collateral for the trade. If the price of Bitcoin falls, the collateral is at risk. Because you’re using low leverage in this example, Bitcoin would have to lose nearly half its value before the exchange took action.

First, you might get a request for more margin to cover the trade. This is called a margin call. However, this might not happen at all. And in fast-moving markets, a margin call still might not give you enough time to respond before your margin levels reach a critical point. This is when the exchange liquidates your position to cover the margin loan and whatever interest has accrued.

Margin trading with low leverage offers a safer option. Some exchanges offer leverage of up to 200x. With 200x leverage, a market move of a half percent in the wrong direction wipes out your trade.

Long Margin Trading vs Short Margin Trading

The example above explored a long trade. In effect, a long trade is a bet that the price of an asset will increase. The above example used a spot market trade, but you can also use futures contracts to trade long.

By contrast, a short trade is a bet the price of an asset will decrease. In crypto trading, you’d usually use a perpetual futures contract to make this trade. This strategy lets you profit from the difference in price if the asset price falls.

Futures contracts don’t necessarily require leverage. In the example below from OKX, the trade allows leverage from 1x (none) to 100x.

1x btc leverage example

However, it’s common to use margin with long or short futures contracts to amplify earnings from the trade.

Let’s say we used a perpetual contract to short Bitcoin (bet on a falling price) and chose 3x leverage. Every $100 decrease in price equals $300 in unrealized profit for the trade. Leverage is just a multiplier.

The opposite is also true, though. A $100 increase in Bitcoin’s price equals a $300 unrealized loss on a short trade. But whether your margin is at risk depends on the size of your trade relative to your margin.

If you made a $900 trade with $300 in margin and Bitcoin dropped by $100, the exchange will liquidate the trade. Typically, this happens prior to reaching zero equity in the trade to cover trading fees and interest on the margin loan.

Cross-Margin Trading vs Isolated Margin Trading

Margin is the collateral you use when trading with leverage. Most crypto margin trading platforms offer both cross-margin and isolated margin, sometimes with different leverage limits.

  • Cross-margin uses all the collateral-eligible assets in your account. For example. let’s say you want to trade long on Bitcoin using your BTC as margin. But maybe you don’t have enough BTC to make a larger trade with safer levels of leverage. With cross-margin, you can use other eligible assets as collateral. If you have ETH, for instance, the exchange will likely let you use your ETH as margin, enabling you to make a larger trade without increasing the leverage to riskier levels.
  • Isolated margin uses only one asset as margin. To revisit the example above, BTC would be your only margin in the trade. To increase the trade amount, the only remaining options are to add more BTC or increase your leverage.

How We Ranked the Best Bitcoin Margin Trading Exchanges

We compared several areas to choose the best crypto margin trading platforms.

Regulation

While the crypto market doesn’t enjoy the same consumer protections as the banking industry, for example, many exchanges are registered with regulators in major markets. Coinbase and Kraken for example are registered with FinCEN in the US and the FCA in the UK. Coinbase is also registered with the SEC and CFTC in the US.

Tradable Cryptos

The number of tradable cryptos played a role in our selection as well. Bitcoin and Ethereum trading make u the bulk of the market, both in spot trading and futures contracts, but we weighed additional trading opportunities for lesser-known cryptocurrencies.

Trading Fees

Trading fees can take a big bite out of profits, particularly when trading with margin. Fees are based on the size of the trade rather than the smaller amount of margin used. We considered fees as part of larger ranking criteria.

Wallet / Security

The safety of your funds when using exchanges is paramount. We looked for exchanges that use cold storage for crypto assets and that employ extra safeguards to ensure security for accounts and crypto wallets

Leverage Ratios

Lower leverage is always safer, but we considered whether exchanges offered higher leverage ratios for more experienced traders who want to make bigger bets.

Margin Levels, Margin Calls

We also looked at maintenance margin requirements on exchanges. Higher maintenance margin requirements can put trades at risk sooner.

Initial Margin, Maintenance Margin, and Margin Calls

When you open a trade, the amount you need in your trading account is called the initial margin. But as the trading price starts to move, maintenance margin comes into play. Maintenance margin refers to the amount of collateral you need to keep the trade open. This amount varies by the type of crypto you’re trading and the amount of leverage you’re using.

As your account approaches the maintenance margin level, the exchange may send a margin call, which is a request for more collateral. The other option close all or part of the trade. Watch your email if you have an open trade.

However, markets can move quickly and a margin call may not arrive in time to fix the trade – or it may not arrive at all. It’s often wise to set stop-loss orders with triggers to safeguard your trading capital and prevent surprise liquidations.

Tools & Features

Trading tools like trading bots, copy trading, demo accounts, and advanced indicators earned extra points.

Payment Methods

Most exchanges offer ways to purchase with fiat currencies like USD or GBP on the platform. Others are crypto-only or only support fiat purchases through third-party providers. We weighed the overall cost and convenience of moving funds onto the platform.

Customer Service

Customer support in the crypto exchange business typically takes the form of live chat or a ticket system. We considered help sections, learning centers, inline help videos, and contact methods for questions that can’t be easily answered with the above.

Is Cryptocurrency Margin Trading Legal?

Crypto margin trading is legal in many markets throughout the world. However, individual governments have imposed regulations that affect how people in a given country can trade or whether they can use margin at all.

In the US, for example, futures trading is regulated by the Commodity Futures Trading Commission (CFTC). Similarly, margin trades are tightly regulated in the US. Most of the exchanges listed above do not offer margin or futures trading in the US. The exceptions, Coinbase and Kraken, require traders to certify their financial ability to trade on margin.

In the UK, the Financial Conduct Authority (FCA) regulates derivatives such as futures. In 2020, the FCA banned the sale of crypto derivatives to retail consumers. Margin trading for other trading instruments is available, though leverage is limited.

Similarly, Canada’s crypto regulatory environment creates challenges for the industry as well. In 2022, the Canadian Securities Administrators (CSA) banned margin trading for crypto trading platforms.

Australia, on the other hand, allows margin trading within limits. Maximum leverage is regulated by the Australian Securities and Investments Commission (ASIC). In 2023, ASIC brought civil charges against Kraken’s exchange provider in Australia, Bit Trade Pty Ltd.

In response to tightening regulations, many exchanges have pulled out of various countries around the world. Binance left the Canadian market in 2023. Many exchanges also use geofencing, determining the location of the device being used, to prevent users from certain regions from using the exchange.

What Are the Risks and Benefits of Crypto Margin Trading?

The leverage used in margin trading is a multiplier, which can multiply your earnings or your losses. First, let’s explore the potential benefits of crypto margin trading.

Margin Trading Benefits

  • Optimized use of capital: Leverage allows you to make larger trades with less capital. This potentially creates greater opportunities when discretionary capital is limited or when investment capital is deployed elsewhere.
  • Potentially outsized gains: Using margin trading also allows you to generate large profits with relatively small market moves.
  • Hedging: Tools like futures allow you to hedge an existing position. For example, if you hold $10,000 worth of Bitcoin, a short BTC contract can play the other end of the trade to profit if Bitcoin falls in price. Using leverage allows you to hedge a larger position with a smaller amount of capital.

Margin Trading Risks

  • Amplified losses: The stakes are higher with margin trading. If you hold $10,000 worth of spot Bitcoin, it’s unlikely that the value will go to zero. If it does, you’ll probably have plenty of time to scrutinize your investment decision and exit the market if needed. Margin trades amplify the effect of market moves on your trade value. It’s also possible – and perhaps even common – for margin trade investments to go to zero. A 10% drop in Bitcoin’s spot value equals a 50% hit to your trade value if you’re using 5x leverage. By definition, markets move faster with leverage, often making it difficult to respond quickly.

How to Mitigate Margin Trading Risk

Consider trading with lower leverage to reduce risk. A 50x trade feels great when the market is going your way, but a 2% change in market value wipes out your initial margin, and it can happen quickly.

Leverage levels of 3x and lower are generally considered safer.

You can also use trading stops. Advanced trading platforms offer the option to set “take profit” orders and “stop loss” orders with triggers. The trigger fires when the price reaches a price you define. If you’ve set a limit price, your position will automatically close at that price after the trigger price is reached. However, in fast-moving markets, limit orders might not be filled. Market orders for stop losses might be safer in volatile markets or when the trade leverage is high.

Conclusion

The best crypto margin trading platforms offer several ways to use leverage, often including spot margin, margin futures trades, or even trading bots and leveraged tokens. But margin trading brings risks because you can lose the entire investment you’ve made in the trade.

MEXC offers a powerful trading platform with hundreds of assets available for margin trading. Fast order executions paired with customizable stop-loss options help protect your trading capital.

You’ll also find well over 100 cryptocurrencies available for futures trading and over 1,000 crypto assets for spot trades. Trading fees as low as 0% for futures trades help make MEXC one of the most affordable ways to trade crypto with margin.

References

FAQs

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Eric Huffman

Eric Huffman has a diverse background ranging from business management to insurance and personal finance. In recent years, Eric's interest in finance topics and in making personal finance accessible led to a focus on cryptocurrency topics. Eric specializes in crypto, blockchain, and finance guides that make these important topics easier to understand. Publications include Milk Road, Benzinga, CryptoNews.com, Motor Trend, CoverWallet, and others. Always learning, Eric holds several certifications related to crypto and finance, including certificates from the Blockchain Council, Duke University, and SUNY. When he's not writing, you might find Eric teaching karate or exploring the woods.