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Welcome to our margin trading guide. In this guide. you will learn what margin trading in Bitcoin and crypto is. how does it work. what exchanges allow margin trading. and more.
What is Bitcoin Margin Trading? Bitcoin margin trading. in simple words. allows opening a trading position with leverage. by borrowing funds from the exchange.
For example. if we opened a Bitcoin margin position with a 2X leverage and Bitcoin had increased by 10%. then our position would have yielded 20% because of the 2X leverage. With no leverage. it would have been only a 10% ROI.
Margin leverage can also be 25X and even higher. despite the risk. the same position as described above would have yielded 250% (instead of 10% with no leverage).
How does Bitcoin margin trading work? In most cases. the exchange provides loans to the traders so they can enlarge their capital to be used for margin trading. This way. traders can open positions with high leverage. The exchange doesn’t have many risks since every position has its liquidation price. which is based on the level of leverage.
To better grasp what margin trading is and how it differs from regular trading. we need to first understand what is meant by the terms trade leverage and liquidation price.
Trade leverage is a ratio that determines exactly how much money is lent by the broker to the trader when executing a margin trade. So. for example. if a trader has 0. 2 BTC and wants to trade with 1 BTC. he would use 5x leverage.
The liquidation price is the price level that protects the broker from losing any of the money that was lent to the trader in a losing position. If an asset reaches the trader’s liquidation price. the entire balance (in the example above. 0. 2 BTC) is lost.
Note: Margin trading is extremely risky. Beginners should not trade with leverage. given that even professional traders often suffer significant losses in margin trades.
In the end. the exchange you choose to perform your Bitcoin leverage trading on will depend on which platform best meets your unique requirements.
Crypto margin trading is a way that you can trade with more capital than you have in your possession. It is a way to increase the size of your trading account. allowing you to make bigger and bolder crypto trades than you would otherwise be able to.
If you’re interested in getting started with crypto margin trading. this guide has everything you need to know.
We’ll explore the best crypto margin trading exchanges out there. allowing you to choose the right one for you. We’ll also answer all your key questions about crypto margin exchanges so you can make a truly informed choice.
What Is Crypto Margin Trading? Before we explore the best crypto margin exchanges out there. and equip you with the strategies and tactics you need to be successful. let’s cover the basic concept of crypto margin trading and what it means.
Crypto Margin Trading Key Terms — Margin LoanThe term margin loan refers to the amount of funds that is lent to the trader by the crypto exchange or broker in order to carry out margin trades. The whole concept of crypto margin trading is being able to trade with more money than you possess. The extra amount exists in the form of a margin loan made between broker/exchange and trader.
CPH Crypto launched at the beginning of September with a clear profile and a strong message to the crypto market: The current level of trading fees set by the biggest international trading platforms does not benefit customers and must be driven down. CPH Crypto’s mission is to make that happen by offering a fixed fee of only 39 USD/month for unlimited trading. Or a commission of only 0. 04 pct. per transaction for single trading.
“When we launched CPH Crypto. the platform offered the most basic services. But now. a few months later we are happy to announce that margin trading and leverage 10x in the crypto spot market are available services on the trading platform. ” says Jan Andersen. CEO of CPH Crypto.
“Active traders should only have to focus on their trading strategy and not on the costs. That’s the core idea and philosophy of CPH Crypto. But active traders also want advanced opportunities. instruments and services like margin trading and leverage to support their strategies and manage their portfolio. These services have been our top priority. ”
“Trust and credibility are key values for CPH Crypto and that’s why we have this rather unusual feature of insured crypto deposit as a cornerstone in our client offer. ” says Jan.
CPH Crypto is registered with the Danish FSA according to the AMLD5 Directive on Anti Money Laundering.
