What is the difference between margin balance and margin equity in the context of cryptocurrency trading?

1 answers

• Elfan NandaJul 16, 2024 · 2 years ago
  Margin balance and margin equity are terms commonly used in cryptocurrency trading. Margin balance refers to the total amount of funds in a trader's margin account, including the initial deposit and any profits or losses from open positions. It represents the available funds for trading with leverage. On the other hand, margin equity is the current value of a trader's margin account, taking into account the unrealized profits or losses from open positions. It is calculated by subtracting the borrowed funds (margin) from the total value of the account. Margin equity is an important metric for risk management and determining the margin level. Traders should pay attention to both margin balance and margin equity to effectively utilize leverage and manage their positions in cryptocurrency trading.
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