© Reuters.
While investors find margin trading and futures very attractive because of their potential returns, they should be cautious and consider all the risks before adopting them.
Risks associated with margin trading
Crypto margin trading is riskier than standard trading because of the leverage component, which may lose the investor more money than they held initially. Especially considering that cryptocurrencies are very volatile and unpredictable assets, the investor may have to provide extra funds to the collateral to avoid being forced to sell.
