What Is Leveraged trading?
What is leveraged trading?
When you use leverage, you are essentially borrowing funds to increase your trading position beyond what you would be able to deposit. You are required to deposit an initial margin (collateral), against which you can borrow funds to amplify your position.
MEX Digital offers up to 100:1 leverage which means your initial margin requirement would be 1.00% of total transaction value. For example, deposit $1,000 as margin in your account and you can trade up to $100,000.
Calculation (using above example):
Margin Based Leverage (100) = Total Value of Transaction ($100,000) / Margin Required ($1,000)
A word of caution for new traders:
Trading using leverage can be very profitable, but also extremely risky as leverage has the potential to enlarge not only your profits, but your losses too. The greater the leverage, the greater your risk. Selecting a high "Margin Based Leverage" to trade can quickly deplete your trading account if the market goes against you.