15:27Bitcoin and Altoquin Margin Trading
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Marginal trade in bitcoins and altokines
Let's start: what is margin trading?
Margin trading is possible due to the existence of a credit market. Lenders provide traders with loans so that they can buy more coins, and lenders receive their percentage of the loan amount. On some exchanges, such as Poloniex, loans are provided by users, and on others - by the exchange itself. For example, on the Poloniex exchange, any user can borrow his bitcoins or altcoins and get a percentage of the loan amount. The main disadvantage is that these coins should be in the exchange wallet, which is far from security, like storage in a cold wallet.
Cost and risks of margin trading
At the same time, you can not only earn more. This is the amount of our funds invested in an open position. This level is called the liquidation value. If you lose your money, you’re not getting any money.
Example: When it comes to the position of a standard trademark with a 1: 1 shoulder, it reaches zero. With the increase of the size of the shoulder, the liquidation will approach the purchase price. For example, bitkoyn costs $ 1,000, and we bought one bitkoyn with a shoulder 2: 1. The cost of our position is $ 1,000, and we borrowed another $ 1,000. Since we’re losing, we’re losing exactly $ 1000.
Marginal trading can be carried out.
Recommendations for margin
Be attentive - Crypto-currencies are considered extremely volatile assets. Margin trading in crypto-currencies Therefore, try to use your shoulder to open short-term positions. In addition, although day commissions are negligible, considerable amounts can accumulate over a long period.
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