OKEx introduces new margin trading pairs – XRP/BTC & LTC/BTC

OKEx one of the most trusted digital asset exchange on Tuesday i.e. 06 Nov introduced new margin trading pairs XRP/BTC & LTC/BTC for their valuable customers.  As per the official announcement made on their website and twitter account –

To meet the public demand , we will open the margin trading pairs XRP/BTC、LTC/BTC from 15:00 Nov 6, 2018 (HKT).

They also reiterated that margin trading involves risks and hence need to carefully evaluated before making investments.

Read more here okex support

Is Crypto Margin Trading Good Or Bad?

Trading on Margin, is it good or bad? Under what condition would it be considered as good? When market is at its peak or there is a dip? That’s the dilemma faced by many traders and investors who want to sail in the world of Margin, but is it good or bad? Let’s explore about the good and the bad of crypto margin trading in today’s post –

An individual borrows capital from the lender so as to invest and buy more assets/cryptos. The individual gets leverage, where he is [based on his analysis and intelligence] making a bet that his returns on the investments made on margin are going to be higher than the interest he needs to pay his lender, excluding fees for now. Point to note that the lender uses your cryptos in your crypto wallet as collateral so as to satisfy your margin. So margin could also be termed as debt.

The Good of Crypto Margin Trading

#1- Margin could help you in fulfilling “sudden capital requirement” or emergency

In need of some urgent capital? Then considering market sentiments, it could be a good idea to invest in Margin Trading. Borrowing capital at this stage based on your analysis may turn towards profit, start investing and in a few days once you make a profit you can cover your margin.

#2 – Margin could help in fuelling other investments of higher returns

There is this dream project you want to start off, or the market is just going as per your predictions and based on your analysis you feel investing more for higher returns, but not enough of it? Then Margin could help you in borrowing that money and reinvesting to get positive returns. Go ahead and use margin to start your position.

The Bad of Crypto Margin Trading

 

#1 – Margin is bad when you invest in cryptos that yield lower than your margin interest.

Although crypto margin trading is available for only selected cryptos, still it is wise to know which ones are the best to help you earn a positive ROI.

 

#2 – Margin is bad when you use it as a down payment for some other debt

 

Do not open Margin to use that capital in any other form of debt, that’s the riskiest venture. Take it this way you are already paying a margin interest on the borrowed amount, using it to get another debt is again starting a new cycle of interest payments and because you wouldn’t be earning any returns on your second investment in case your margin trade results in  a loss, it means no capital to pay interest of second debt as well.

What are your stories of Good and bad in crypto margin trading? Would love to know them. Please share your feedback with us @getnuo , our twitter handle.

 

References

goodfinancialcents, nerdwallet

Four Facts of Crypto Margin Trading

Crypto Margin trading is rewarding as well as risky, while the investor needs to be smart and familiar with the basics he also needs to be aware of basic facts about crypto margin trading. Sample this –

You are an investor putting money worth $10,000 in cryptos and couple of days later the same $10,000 is valued at $20,000, and a few days later the investment is just $200. It’s insane! Isn’t?

Hence, it gets crucial for investors to know the basic facts of crypto margin trading. Let’s get started –

Facts of Crypto Margin Trading

Experience Pays

You could be next Vitalik Buterin, but margin trading needs only veterans. The investor should know the rules of the game. The world of cryptocurrency and on top of it applying margin trading strategy is a risky approach, and hence best suited for experts. Reading a book or a Reddit comment that says how I made $10,000 via crypto margin trading could be fabricated stories with no supported base. Hence before making any investments gain experience, get trained, acquire skills and then jump onto the arena.

Start Slow

Being a pro does not entitle you to opt for higher levels of leverage. With crypto margin trading, the mantra is – BE A TURTLE. Effective risk strategy is essential but starting slow is also much more crucial. Start by using a lower level of leverage and do not put a massive investment from day one, estimate your loss in case the market isn’t expected as you speculated.

IF you are trading too much in the crypto world that is a highly volatile market, it can even lead investors losing 200-300 BTC in a few days.

Risk Management is critical

Starting slow is one of the active risk management strategies and so is the option of using a stop loss. It boils down to “How much you can lose”? So if you bought bitcoin at $10,000, you could set a stop loss order at $8,500. It would help in limiting your loss to $2,500.Be very cautious while using stop-loss as a risk management tool, because if you set a price too close to buying price, you may lose and put a stop occur before any profit is seen. Or if you select a broader range that could also result in substantial losses. Read more here at Five Crypto Margin Trading Tips Investor Should Know

 

Cushioning is prime

Last but not the least is never ever put all your money on a single trade, even though you are 200%sure of returns. Make sure to keep some spare cash for unforeseen circumstances and when the market is not on your side.

Do you have any fact to share about Crypto Marin Trading? Feel free to post on our twitter page here.

 

References

Finder, Coinsutra, cryptopotato

 

dYdX raised $10 Million to help you short Ethereum

A crypto startup dYdX raised $10 million from investors to design and develop a sowaftre that assist individuals to borrow money from each other without a broker. The firm has developed a margin trading protocol that is based on the computing network Ethereum. The prime motive is to provide a platform to individuals to create new cryptocurrency-related financial products, like interest-generating loans, short sells, or leveraged long positions.

The team is set to launch more assets that includes a long leveraged Ethereum token, that is designed to amplify the gains/losses of traders trading on margin. The team is also planning to add newer assets in future depending on their liquidity such as native coin of 0x or the ZRX token.

Read more at fortune

Terms You Need To Know – Margin Trading, Margin Funding, Long and Short Position

We spoke a lot about Crypto Margin Trading, How it works, pros and cons, Ethereum Margin trade, bitcoin margin trade, and even margin trading tips but there are some of the terms which are yet to be explored. Our post of today would narrate some of the terms like – Margin Trading, Margin Funding and What it means to have a long position and short position in a Margin trade.

Let’s get started –

Margin Funding and Margin Trading – What’s the difference?

 

What is Margin Trading?

Margin Trade or Margin Trading is a process of borrowing funds from brokers/exchanges that could be used to buy cryptos of a large amount. So for example –

If you are planning to buy $10,000 worth of Bitcoin

With borrowing 50% Or leveraging 2:1 or 2x

Then you would only need $5000 to purchase a bitcoin worth $10,000.

With the leverage, an investor is allowed to own a capital worth more of its buying capacity. There are many platforms that offer a leverage up to 100x, but please be cautious before investing as it’s a risky venture.

What is Margin Funding?

Margin Funding is precisely opposite of the margin trade, where the lender offers amount to a trader to fund an investment.

So continuing the same example –

If a trader is planning to buy $10,000 worth of Bitcoin. 2:1 or 2x leverage, the lender or funder could offer a loan of $5000 to the trader.

The trader would need to pay a margin funding interest fixed by the borrower/platform. Here the terms, i.e. return rate, duration, and the amount could be chosen by the lender or fixed by the exchange.

Margin Funding is considered to be a safe option for many investors, as the borrower pays for your losses.

Long Position and Short Position in Crypto Margin Trading?

In Margin Trading, investors need to apply their intelligence and analysis to predict strongly if the crypto price would move up or down.

So, if you are planning to make a profit with Bitcoin price moving up, you might need to consider opening a long position. Here is an example that demonstrates how a long position in crypto margin trading works –

How Long position in crypto margin trading works?

Say, as a trader you wish to procure Bitcoin worth of $600 and based on your prediction you have come to conclusion that Bitcoin price would move upwards.

So, with 1:2 leverage you borrow $300 and buy Bitcoin worth of $600 when price moves up say $900 the profit you earned would be $300 [ 900-300[account balance]-300[borrowed money]], i.e. excluding fees/interest.

This is known as a Long position in crypto margin trading.

Now, if you are planning to make a profit with Bitcoin price moving down, you might need to consider opening a short position. Here is an example that demonstrates how a short position in crypto margin trading works –

How Short position in crypto margin trading works?

The current price of Bitcoin is $400 and again as per your smart analysis you come to a conclusion that prices would be dipped further, then you can earn a profit by selling the borrowed cryptos and repurchasing them later at a lower price.

The exact opposite of a buy position and even the profit/loss is reversed.

So if you opened a 2x short position with $100, if it went down 50% you’d earn $100; if it went up 50%, you’d have lost $100, and the exchange would close your position.

Hope this narration helps you in understanding Margin Trading better. Happy Trading.

References

Bitfinex; Bitcoinkit; cex.io

How and Where to Margin Trade Bitcoin?

The world is divided, while some support crypto Margin trading to be a blessing, few others are against it. In spite of the clash, speculators and investors are investing and making a fortune and others who are losing it. Which side are you at? Until you make up your mind, how about knowing How to Margin Trade Bitcoin? Exchanges that support Bitcoin Margin Trading?

Let’s get started –

How To Margin Trade Bitcoin?

Margin Trading – a process of borrowing money from an exchange/broker to fund a large amount of investment. While in our last post we described adopting to stop loss would be a good idea, make sure to follow other Crypto Margin Trading Tips as well.

The Margin Trading concept, when applied to Bitcoin, is known as Bitcoin Margin Trade. So for example –

The current price of Bitcoin is $600, and as an investor, you are expecting the price to grow.

To make a profit, you are willing to buy Bitcoin now and sell them later at a higher price.

Balance $300
Borrowed money $300
Leverage 1:2 leverage
Closing Position when the price hits $800 $300 of balance is returned.
Profit earned ~$200 [ $800 – $300 – $300] fees not included.

 

Exchanges to Margin Trade Bitcoin

BitMEX

BitMEX or Bitcoin Mercantile Exchange is a peer-to-peer trading platform that also offers leveraged contracts that are bought and sold in Bitcoin. At BitMEX you would find crypto derivative instruments being sold and bought on margin trade.

BitMEX, the only exchange in the market that could provide 100x leverage, i.e., for every BTC/XBT you own, you can trade as if you have 100 BTC/XBT. You can also trade Bitcoin Cash at 20x leverage. It’s worth noting that BitMEX only accepts BTC deposits and no other currency, even the profit and loss are in BTC.

To start off trading on BitMEX you can register here.  You just need your email to set up and could secure your wallet using two-factor authentication. Bitmex is very high risk or high reward ether leverage trading; please trade cautiously knowing the risks.

Cex.io

If you are looking to invest a large sum of money, CEX.io is a decent place to start with crypto margin trading. It offers Bitcoin, Ethereum and Bitcoin Cash margin trade with 3x leverage. Providing services across the globe, they accept Visa, Mastercard, bank transfer and cryptocurrency payments.

To start off, you can register here, and once the account is verified, you may start trading.

Kraken

Kraken, one of the largest Bitcoin and altcoin exchanges in the USA offers crypto margin trading with the advantage of different leverage options for different pairs. Check here different currency pairings that could be traded on margin using leveraged orders.

To start off, investors can register on their website using the email id, that follows with KYC verification. Usually, it takes up to 7-10 days to get the verification completed.

How and Where to Margin Trade Ethereum?

Crypto Margin Trading offers traders with access to borrow the capital and make a purchase of a larger volume of cryptos. In case of margin Trading Ether, the investor lends money/crypto to access Ether of larger volume. Our post of today will talk about how and where you can Margin Trade Ethereum. Let’s get started –

How to Margin Trade Ethereum?

Margin Trading Ethereum means to borrow capital from a lender or Exchange to purchase a larger volume of ether. The amount that is borrowed is the “initial margin” and predefined by the exchange and could vary with each platform. Many traders find margin trade as lucrative trade. However, even risks are considerable and hence practice cautiously.  To limit traders from borrowing too much, the margins are limited called as maintenance requirement.

Let’s pick an example –

Anthony wishes to margin trade on Ethereum.

So,

Amount Deposited as maintenance requirement $5000
Borrowed money $5000
Purchasing Ether worth of         $10000
Initial Margin set 25% i.e. value of the purchased Ether drops to $8,000, Anthony would need at least $2,000 (25% of $8,000) in equity
Total Equity with Anthony $3000 [$5000 -$2000]

With a price drop such that it results in total equity with Anthony less than $3000, margin call would be initiated. That means either Anthony needs to top up to maintain the maintenance requirement or the exchange would sell off his Ether to bring the account back up to the maintenance requirement.

 

Exchanges to Margin Trade Ethereum

Here are some of the exchanges that allow traders to Margin Trade on Ether.

Bitfinex

Bitfinex, founded in 2012 is a cryptocurrency trading platform that has its headquarters in Hong Kong and registered in the British Virgin Islands. The exchange facilitates spot trading for most of the digital assets like Bitcoin, Ethereum, EOS, Litecoin, Ripple, NEO, Monero and many more. They also offer Margin Trading through their peer-to-peer margin funding network allowing traders to securely trade with up to 3.3x leverage.

Individuals interested in Margin Trading can visit here. The traders have two option, either they can enter an order to borrow the desired amount of funding at the rate and duration of their choice, or they can simply open a position and Bitfinex will take out funding for them at the best available rate at that time.

Bitfinex now support leverage trading Ethereum Classic in ETCUSD and ETCBTC markets

BitMex

BitMEX or Bitcoin Mercantile Exchange is a peer-to-peer trading platform that also offers leveraged contracts that are bought and sold in Bitcoin. At BitMEX you would find crypto derivative instruments being sold and bought on margin trade.

BitMEX, the only exchange in the market that could provide 100x leverage, i.e., for every BTC/XBT you own, you can trade as if you have 100 BTC/XBT. However, perpetual Ether contracts can be leveraged up to 33x. It’s worth noting that BitMEX only accepts BTC deposits and no other currency, even the profit and loss are in BTC.

To start off trading on BitMEX you can register here.  You just need your email to set up and could secure your wallet using two-factor authentication. Bitmex is very high risk or high reward ether leverage trading; please trade cautiously knowing the risks.

References

Wikipedia, Bitfinex, Coinsutra, BitcoinDaily, Ethereumprice, MarginTradingBitcoin.

Cobinhood, New Tokens Added with Margin Trading and Funding

Cobinhood exchange – that charges no fees for trading have planned to add new tokens XRP and NEM to expand the reach of their services. The exchange has also added a benefit of margin trading and funding with Ethereum (ETH), Cobinhood Coin (COB), and Bitcoin (BTC). The announcement was made on Twitter.

The new cryptocurrency trading features would be launched on the platform on October 19th, allowing users to maximize their crypto assets.

Cobinhood recently made cryptocurrency headlines for receiving the Red Dot Award: Communication Design in 2018. They are the first crypto-related business to win this accolade, establishing a historical difference in the industry.

Read more at bitcoinexchangeguide

Image Courtesy – cryptocurrencynews.com

Five Crypto Margin Trading Tips Investor Should Know

Margin Trading is a risky venture if not played responsibly you may lose more than you invested. But then how come individuals make a fortune out of it? While few of the investors argue that you have to compete against a bot to make profits, others recommend to sail cautiously, and be the turtle while trading, so whom to follow and whom to not?

Our today’s post would narrate some of the tips and tricks to follow while executing a cryptocurrency margin trade. Let’s get started –

Crypto Margin Trading Tip # 1

Start With Small Amount

It’s a good idea for a beginner to start with a small amount to minimize risks, by using a low level of leverage and avoiding using up of funds in one transaction. Crypto Margin Trade showcase a significant probability of “High Returns” but unless you know the nitty-gritty of the market, the technical indicators, the workflow, how to open and close margin positions, what are margin ratios and calls or even different margin trading strategy you may not be able to boost your returns.

Starting small help in experimenting and exploring the domain, and once you master the art of trading, you can expand your reach, adding more funds to your portfolio and receive success.

Crypto Margin Trading Tip # 2

Follow news and learn to decipher it

Crypto Market is highly volatile, till 2017 the price of Bitcoin reached till 20,000 and 2018 has seen a significant dip. All these price fluctuations have been influenced by some of the other events happening around the world, just for example when SEC rejected the ETF’s proposal or when China put a pause to Token Trading. As an investor interested in crypto margin trading you should know when to buy the rumor and when to sell the news. Striking the chord at the right time would make all the difference and make you a gainer or loser. So watch out the events and make smart decisions.

Crypto Margin Trading Tip # 3

Manage Risk

One of the critical parts of managing risk with crypto margin trade is minimizing your loss. You may want to opt for a Stop loss order, so if you bought bitcoin at $9,000, you could set a stop loss order at $7,500. It would help in limiting your loss to $1,500. But again sail cautiously while using stop-loss as if you set a price too close to buying price, you may lose and put a stop occur before any profit is seen. Or if you select a broader range that could also result in substantial losses. Again learning and knowing the details about when and how to opt for the strategy would be a great help.

Crypto Margin Trading Tip # 4

Access online and Offline storage

Do not put all your eggs in one basket that simply means if you have a lot of cryptocurrency use online and offline wallets to protect them from hacking. Storing the significant cryptos in an offline wallet or cold storage is less risky and could help protect yours from unauthorized access of digital currencies.

Crypto Margin Trading Tip # 5

Spread buying options and platforms

Spread your wings that merely means spread out your buying options, i.e., in a matter of weeks or days. It helps in allowing you to analyze what is working and what isn’t and lowers the risk in case an investment turns against your expectations. Additionally, it provides you time to adjust to the new domain.

Even picking different platforms/exchanges would be a good idea to explore and analyze how and where you can maximize your returns.

While crypto margin trade involves adventure and excitement, it has its downtime as well. All you need to apply is caution, intelligence and baby steps.

 

References

Bitcoinexchangeguide, Finder, cryptocurrencyfacts

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