You may already be familiar with Exchange Trading, which is available on most cryptocurrency exchanges - including Coinmetro!

Here are the main differences between Margin and Exchange trading:

Features

Exchange Trading

Margin Trading

Do wallet balances update immediately after an order is filled?

Yes

No - instead an open position is created which has a floating profit or loss (P/L) that automatically updates as market prices change

Can leverage be used?

No

Yes - leverage can be used (up to 5:1 at CoinMetro) to amplify potential gains and losses

Can the trade value exceed available funds?

No

Yes

Can you sell (short) an asset that you don't own?

No

Yes

What is the maximum trade size?

The available balance of the asset being sold

Free margin x leverage equivalent value

When do wallet balances update?

Once the order has been filled

Once the position is closed

For which assets do the wallet balance(s) update?

The assets being exchanged

The settlement currency. At CoinMetro, this will be your primary collateral currency

Can I withdraw my bought assets to an external wallet?

Yes

Settled profits can be released from collateral and withdrawn; however, other assets in open positions cannot

Summary

In summary, Margin Trading provides the most flexibility if your main goal is to generate profits with added leverage.

If you instead want to purchase cryptocurrencies for long term holding and/or for trading without greater risk, then Exchange Trading would be more suitable for you.

Coinmetro’s Demo Platform is always available if you would like to practice without risk. Please note that this article is not to be seen as trading or financial advice. It is for educational purposes only.

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