What is Leverage and Margin Trading?

For starters, a leverage/margin trading exchange is a platform that allows the traders to regulate trades by borrowing additional funds in order to amplify their position in the market. To simplify, instead of investing the total market value, the investor deposits with a leverage ratio offered by the exchange, where he/ she can borrow a sum LARGER than the margin that they invest in. Here, margin refers to the minimum amount that the user deposits with the exchange, in order to initiate the trade. Leverage is the amount of additional funds that he/she borrows from the exchange to carry out the trade and make enormous profits.