A margin account is a type of brokerage account that allows you to trade with borrowed funds, lent by the broker (Nexo).
𝙒𝙝𝙖𝙩 𝙞𝙨 𝙡𝙚𝙫𝙚𝙧𝙖𝙜𝙚?
A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt (loans) or assesses the ability of a user to meet its financial obligations.
To expand further, margin trading is built on the principle of leverage, meaning that as a result of the trade you will receive the desired asset in a larger amount. In other words, the value of the purchased asset will be greater than the value of the asset you initially had in your balance. The difference between those values - the borrowed amount - will be reflected in your account in the form of a loan.
It is important to remember that leveraged trading can magnify the loss as well as the profit. For that reason, it is associated with greater risk and requires a deeper understanding of the process. We strongly recommend reviewing the following articles about Margin Trading before placing margin orders on Nexo Pro: