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Margin trading
Margin trading is buying or selling with money borrowed from a broker or exchange, using the assets in your account as collateral. It makes a position larger than your own cash allows, which makes both gains and losses larger.
What it means for you. On margin you can lose more than you put in. If prices fall, you can be asked to deposit more on short notice, and the firm can sell your holdings without asking you first, choosing what to sell. Interest on the loan runs the whole time and reduces any return.
Sources: SEC Investor Bulletin: Understanding Margin Accounts, CFTC Glossary, Cheng, Deng, Wang and Yu: Liquidation, Leverage and Optimal Margin in Bitcoin Futures Markets (arXiv) · checked 4 October 2026
Leverage
Leverage is trading with borrowed money so a position is larger than the funds you put up. With 5x leverage, a deposit of 100 controls a position worth 500. Gains and losses are both multiplied by the same factor.
What it means for you. At 5x leverage, a 20% move against you can erase your whole margin, and the platform can close the position automatically before you can react. A regulator warns that leveraged traders can lose more than their initial investment. Check the liquidation price before opening a position, not after.
Sources: CFTC: Understand the Risks of Virtual Currency Trading, Hyperliquid docs: Contract specifications · checked 4 October 2026