Users lose their initial investment more quickly, especially if their positions are liquidated due to market volatility. Please note that the Binance margin platform offers an insurance fund to protect users from over-leveraging and negative balances, so that traders only lose their initial investment in the event of liquidation.

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Disadvantages: Interest costs. One of the most significant costs of margin trading is the interest charged on borrowed funds. When users borrow to open leveraged positions, they must pay hourly interest on the principal amount borrowed. Accumulated interest is automatically added to the total debt in the margin account. As this debt grows, the account's margin level decreases and increases the risk of liquidation. Over time, if the margin level drops significantly without additional collateral or profitable trades, users face a greater risk of forced liquidation to cover their debts.