Margin trading involves borrowing capital from a broker or cryptocurrency exchange to increase potential buying power. The amount of leverage offered can vary, allowing traders to take on larger positions. In this set-up, traders usually must deposit a certain portion of the total trade value, known as the margin. While this method can lead to significant profits, it also carries the risk of substantial losses, which can exceed the initial investment. To maintain their position, traders are required to keep a minimum balance, and if the account value falls below this margin requirement, a margin call occurs, requiring the trader to deposit more funds or face liquidation of their positions.