Creators may favor using margin trading as it provides several benefits:
- Increases your buying power: Margin trading enables you to invest more than you otherwise could
- Enables short selling: Incorporating short-selling into your trading strategies doubles your profit opportunities, as you can make money not only from price increases but also from price decreases.
On the other hand, margin trading is considered significantly more risky than spot trading. The reason for this is that margin trading involves borrowing assets that you do not own and your debt becomes dependant on the price of the asset, which is outside of your control.
To fully understand the risks of margin trading, we encourage you to complete the Binance academy on margin trading: