Margin trading enables you to gain exposure to a position while only committing a percentage of the capital that would be required to open that same position in a conventional trade. The remainder of the capital is lent to you by your broker but your profits and losses are calculated on the full value of the position, not just your initial deposit amount.
It's important to understand that trading on margin therefore has the potential to amplify your profits but the flip side of that is that, if the market moves against you, your losses will also be magnified. Throughout this guide we'll cover all the key points around margin trading, starting with how it works.
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