CoinSutra » CryptoTrading » 8 Best Crypto Margin Trading Exchanges Compared (2020)
One of the best ways to make money in the cryptosphere is by trading cryptocurrencies.
Usually referred to as day trading, it can be highly rewarding and extremely risky at the same time, depending on your trading methods and also your competency. Even though margin trading is the riskiest, it is also an enormously rewarding form of crypto trading.
For those who do not know, margin trading is a form of trading in which you trade with an extra amount of money borrowed from someone on the basis of the money you already have. This is also called leverage.
For example, if you have $100 and you leverage (borrow) $1000 on this existing $100 to trade, it is called margin trading.
Note: Margin trading is highly risky, crypto margin trading even riskier.
What if you could leverage your long and short positions on Bitcoin by 2X, 10X or even 100X, without having actually to hold the capital required to open such positions?
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.
Bitcoin Margin Exchanges | How to short Bitcoin? | Margin trading tips | Costs and risks
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.
Trading cryptocurrency is generally simple, but what if you’re looking for options that are a bit more advanced? That’s where margin trading comes in.
Margin trading lets you amplify your gains from market swings, allowing you to execute more complex, active trading strategies. With the power of Kraken’s advanced trading engine, you can use leverage to go long or short on a variety of cryptocurrencies by up to 5x — you’ll have five times the earning potential compared to a regular spot trade.
Leverage is a key feature of a PrimeXBT trading platform, and can be a powerful tool for a trader. You can use it to take advantage of comparatively small price movements, ‘gear’ your portfolio for greater position size, and to make your capital grow faster.
Leverage works by using a deposit, known as margin, to provide you with increased exposure. Essentially, you’re putting down a fraction of the full value of your trade – and PrimeXBT is providing you the rest. Our products allow traders to gain exposure to major cryptocurrencies, such as Bitcoin and Ethereum and others, without tying up lots of capital.
To open such trade with a traditional exchange, you would be required to pay 10 x $10,000 for a position of $100,000 (ignoring any commission or other charges).