What are the risks associated with trading tws. on margin?

1 answers

• Dec 18, 2021 · 3 years ago
  Trading tws. on margin in the cryptocurrency market carries inherent risks that traders should be aware of. One of the risks is the high level of price volatility in the cryptocurrency market. Prices can fluctuate significantly within short periods of time, which can result in substantial gains or losses. Another risk is the potential for margin calls. If the value of the trader's position drops below a certain threshold, they may be required to deposit additional funds to maintain their position or risk having their position liquidated. Additionally, traders should be cautious of the counterparty risk associated with margin trading. They are essentially borrowing funds from the exchange or other traders, and if the counterparty fails to fulfill their obligations, it can lead to financial losses. It is important for traders to thoroughly understand the risks involved and to use proper risk management techniques to protect their investments.
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