Today, we (very excitedly!) rolled-out our long-awaited margin trading platform! If you’re a professional trader, you’re probably very familiar with the concept of margin trading. If you’re not sure what it is, how to use it, and what its advantages are, however, this blog post is for you! It should, hopefully, give you a nice introduction to the concept and help you get started if you wish to. So, let’s hit it!
Essentially, trading on margin is trading on account using ‘leverage’ from a brokerage company or a crypto exchange. These funds are used to amplify your position and make bigger gains. However, it should be noted that losses can also be amplified by the same measure.
In order to start margin trading, you have to have a certain sum of money on your own account, as collateral. The leverage amount, i.e. the amount of ‘amplification’ you can get depends on the specific exchange. In Forex, it’s not unknown to have a leverage of up to 1:20 – which means, if trading with 100 EUR you’ll command a position size of 100 x 500, so 50,000 EUR.
In crypto, margin trading is a pretty new thing, and as ever, in bringing it to you CoinMetro is right on the cutting edge of the industry.
At launch, we’re offering 1:3, which means that if you want to make a trade with your 100 EUR deposit using margin trading, you can command a position size of up to 300 EUR. The rest will be posted by the exchange which charges a fee for it – in our case, we’ll charge a 30% annual fee, which is calculated every second – which means only pay for the amount of time you take the posted margin.
As a responsible exchange, we want to encourage and support you. If your account goes into the negative, we won’t chase you for that money, we take this on ourselves. So, in short – with CoinMetro you will never lose more money than you deposit. We’re nice like that.
Margin trading is a great facility that can work wonders if used reasonably. Take a closer look on the CoinMetro platform, try to feel where the market is going, and give it a shot if you feel confident.
If you have any questions about margin trading, don’t hesitate to leave your comments below ⬇️ or contact our customer support team.
See you soon,
The CoinMetro Team