Crypto exchanges with the possibility of margin trading
The rapid growth of the cryptocurrency market between early 2017 and early 2018 attracted the attention of hundreds of thousands of traders and investors around the world.
However, the prolonged downtrend that followed left many of them disappointed.
There are several reasons for this: some of the traders sold cryptocurrency, closing trades at a loss, while others, having gained patience, sadly look at the continuing development of the downtrend, making their deposit smaller and smaller.
However, there are those among traders who were able to take advantage of the situation and made good money on the epic drop in the price of Bitcoin and other cryptocurrencies, resorting to margin trading services provided by some cryptocurrency exchanges.
MARGIN TRADING.
Margin-based arbitrage trading is not at all a new type of trading in the exchange and over-the-counter markets. Trading with leverage, as it is also called, appeared on financial markets thanks to London Stock Exchange LSE, where the first CFD-contract was concluded in 1992.
Subsequently, CFD margin trading became widespread through numerous exchange and over-the-counter brokers, creating an entire industry, which many of us know as “forex trading”.
WHAT IS MARGIN TRADING
Essentially, a leveraged arbitrage trade is a kind of bet between a broker (or exchange) and a trader, secured by collateral on each side.
THE MAIN ADVANTAGES OF MARGIN TRADES ARE:
The possibility of entering into a transaction with a volume that is several times greater than your deposit. This effect is achieved thanks to technology of leverage, thereby increasing your profit by several times.
The ability to earn both on the rise and fall in the price of an asset. And here it is important to note that it is possible thanks to the fact that you do not buy or sell the asset itself, but only conclude a contract on change of cost under the guarantee of fulfillment of obligations.
Margin trades on the cryptocurrency exchange
OBLIGATIONS IN MARGIN TRADING
THE EXCHANGE UNDERTAKES:
- open or close the trade at the nearest available price or the price specified in the pending order.
- Pay you a profit on the trade.
- To give the leverage, according to the size specified in trading conditions.
TRADER UNDERTAKES:
- Provide a deposit (margin), determined by the size of a deal (it is calculated automatically at the moment of conclusion of a deal). 2.
- 2. Ensure that the amount of loss on the deal does not exceed the maximum size of the trader’s deposit.
Now, as you can see, you have an opportunity to earn on cryptocurrency, not only buying it based on price growth, but also to earn by means of margin transactions, making bets with cryptocurrency exchanges, both rise and fall of quotes.
CRYPTOCURRENCY EXCHANGES WHERE YOU CAN TRADE WITH LEVERAGE
To date, the crypto market has not many exchanges where traders can trade on margin. Poloniex, Bitfinex, CEX.IO, Kraken, GDAX are among them, given their popularity and long term operation.
However, one should not forget that in addition to cryptocurrency exchanges, margin trading in cryptocurrencies is also available through OTC brokers’ platforms, which often have better trading conditions than cryptocurrency exchanges.
