Enter your search term here Search New support ticket. May 19, · What is margin trading? Margin trading is a high risk strategy and it can yield a huge profit if your predictions are correct. On the flipside you can lose more than your initial investment if it goes out of the money for you. Dec 01, · Trading on margin requires a certain part of the available account balance to be pledged as collateral for every position: in other words, the amount pledged as a percent of the margin account balance defines the leverage.
Margin trading hitbtcHitBTC Exchange Introduces Margin Trading / HitBTC
This tool can be used for all the order types currently available with normal trading. The only thing different is the amount of potential profit, which increases due to the ratio of borrowed funds to the margin that is leveraged. Update : New pairs added to our new margin trading feature! Consequently, your profit here is units. And now suppose that you would like to use the maximum x10 leverage and borrow ETH from the margin lender, depositing the same units as collateral.
In this scenario, if the price of the latter increases by the same units, you will be able to sell your BTC for 14, ETH and gain a profit of 13, units — or ten times more than you would have made with only your initial investment. This also works when market prices drop. The margin call level applies to the ratio of your account balance to the used margin, calculated in percent, at which your open positions are close to be liquidated by a broker. When this happens, users will receive a call notification in the form of a pop-up appearing in the browser and suggesting that they either close some of their positions or add some more funds to their margin.
But it is also crucial to constantly monitor the margin level yourself in order to be able to increase the amount of collateral and reduce liquidation risks in time. At HitBTC, the supplier of digital assets to trade with on margin is the venue.
Trading on margin requires a certain part of the available account balance to be pledged as collateral for every position: in other words, the amount pledged as a percent of the margin account balance defines the leverage. The maximum leverage available is defined by the venue or broker and may range from all the way up to x and beyond such leverage is hardly ever available in the digital assets markets due to their relatively high volatility; however it has been offered from time to time by certain brokers.
On the other hand, if the price of BTC falls to such a level that funds on the account can no longer cover the minimum required funds to keep the position open, the position is then liquidated.
More about the liquidation mechanism is described in this article.