What are the differences between a cash account and a margin account when trading cryptocurrencies on Robinhood?

3 answers

• Dec 27, 2021 · 3 years ago
  A cash account is a type of trading account where you can only use the funds that you have deposited to buy cryptocurrencies. With a cash account, you cannot borrow money from the broker to trade. On the other hand, a margin account allows you to borrow money from the broker to trade cryptocurrencies. This means that you can potentially trade with more funds than you have deposited. However, it's important to note that trading on margin involves higher risks and potential losses.
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• Dec 27, 2021 · 3 years ago
  When using a cash account on Robinhood, you can only make trades using the funds that you have available in your account. This means that you need to have enough cash in your account to cover the full cost of the cryptocurrency you want to buy. In contrast, with a margin account, you can use borrowed funds to make trades. This can be useful if you want to take advantage of market opportunities without having to wait for your funds to settle.
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• Dec 27, 2021 · 3 years ago
  BYDFi, a popular cryptocurrency exchange, offers both cash accounts and margin accounts for trading cryptocurrencies. With a cash account on BYDFi, you can only trade with the funds you have deposited. On the other hand, a margin account allows you to trade with borrowed funds, which can increase your trading power. However, it's important to carefully manage your risks when trading on margin, as losses can exceed your initial investment.
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