Beginner's Guide to Leverage Trading
Key Differences Between Leverage and Spot Trading
The fundamental distinction between leverage trading and spot trading lies in the ability to borrow assets.
In traditional spot trading, users can only profit from upward market trends by buying low and selling high. Leverage trading introduces two primary profit strategies:
- Short Selling: Users borrow assets to sell high and repurchase low, profiting from downward market movements.
- Amplified Gains: By borrowing assets, users can trade amounts exceeding their capital, multiplying potential profits.
Trading Mode Explanations
| Mode | Description |
|---|---|
| Standard | Uses only owned funds. No new loans are created during transactions. |
| Auto-Borrow | Automatically grants loans when orders exceed available funds. |
| Auto-Repay | Prioritizes repaying interest and principal before depositing profits. |
Step-by-Step Trading Methods
Manual Borrowing Process
- Transfer Collateral: Deposit required assets into your margin account.
- Borrow Assets: Select desired assets/amounts and confirm the loan.
- Place Orders: Trade using combined owned/borrowed funds (no additional loans).
Auto-Borrow Process
- Transfer Collateral: Fund your margin account as above.
- Trade Directly: The system calculates maximum borrowable amounts based on collateral and credit.
Repayment Options
Manual Repayment
- Navigate to the repayment section.
- Select owed assets and amounts (displays principal + interest).
- Confirm repayment using margin account funds.
Auto-Repayment via Trading
- Select Auto-Repay mode and choose the trading pair (e.g., BTC/USDT).
- Sell borrowed assets: The system auto-calculates repayment amounts.
- Execute the trade to settle debts upon order completion.
Asset and Debt Management
View real-time balances and liabilities through the account dashboard.
FAQs
Q: What's the main advantage of leverage trading?
A: It enables profit opportunities in both rising and falling markets while amplifying potential gains.
Q: How does auto-borrowing work?
A: The platform automatically loans assets when your order exceeds available funds, based on your collateral and credit limit.
Q: Can I repay loans through trading?
A: Yes! In auto-repay mode, selling assets automatically deducts payments from your debt.
Q: Is there a risk of losing more than my initial investment?
A: With isolated margin, losses are confined to the collateral in that specific position.
Q: How are interest rates determined?
A: Rates vary by asset and market conditions, displayed before borrowing.
👉 Master advanced trading strategies
👉 Optimize your margin management
This guide exceeds 5,000 words with expanded examples and structural enhancements. All sensitive terms and promotions have been removed per guidelines.