The Investopedia Stuff:
Buying on margin is borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you’d be able to normally. To trade on margin, you need a margin account. This is different from a regular cash account, in which you trade using the money in the account.
Margin trading is a concept which allows you to buy more than what you can buy. It’s like a loan from your exchange. For ex: you have a 20000 Rupees but you want to buy coins worth 100000 Rupees, with Marginal Trading you can do that easily.
Advantage & Disadvantages
When used responsibly, an investor who is making smart investment decisions can receive significant benefits from trading on margin. The main advantage is that the use of leverage provides an opportunity of earning a large profit on an investment that you never fully pay for.
However, you must have a very clear understanding of what you are risking if the investment doesn’t fare as well as you had planned.
Some disadvantages to trading on margin include magnified losses and less control of your investment portfolio. If you are thinking about a margin trade, it is very important to remember that you can lose more money than your original investment. In the event of a margin call, you may be required to deposit additional funds into your account or sell your securities in order to meet the maintenance requirements. Also, be aware that if your margin call is not filled, then your exchange has the right to sell some or all of your securities without your permission.
How to use it on Bitbns?
Step 1: The Margin Trade section
Step 2: Select the coin you want to Lend/ Borrow.
Select from BTC, ADA, ETN, ETH, Gas, LTC, NEO, Ncash, RPX, XRP, Sia, XLM, TRX.
Make sure you have the minimum sum for the same.
Step 3: In this example, we are taking NEO.
Important things to remember, The No. of days you want to Lend/ Borrow for.
Bitbns Offers 1-30 days of Lending/Borrowing Time.
Interest rates are 0.055% per day.
Final Step: Click on the Lend/Borrow button to finalize the decision.
How can you earn more?
1. Using the interest rates that exchanges pay.
2. Using the borrowed coin for Arbitrage. (Selling at a higher price on other exchanges)
Other methods are risky including these but these methods listed above are tried and tested by me. I would suggest doing a proper research before making any decision.