5 Best Bitcoin Margin Trading Exchange 2021.
In this article, we will be talking about Bitcoin margin trading exchanges and their various features. Read our previous article to learn what is Margin trading ?
What is bitcoin margin trading?
Bitcoin margin trading means trading on borrowed bitcoins. You sign up for one of the above exchanges and activate your margin trading account. Then you can apply for the loan on the platform and trade using the coins you receive.
How does bitcoin margin trading work?
After you activate your margin trading account and successfully log in. You need to deposit some funds, and then you can apply for a loan in BTC using your deposited funds as collateral.
The exchange charges you an interest every day, which updates frequently depending on the exchange.Bitcoin
margin trading example.
Let us assume you deposit 1 BTC in your margin trading account and choose a leverage of 10x. Then exchange will provide an additional 9 BTC in your account and charges you an interest every hour.
Now let’s say you have a 3% increase in BTC value, then you will have a total return of ( 3×10 = 30% ). However, you should keep in mind crypto market is highly volatile, and BNB you can even suffer a 30% loss at the same time.
Best bitcoin margin trading platform.
There are many options available in the market, and we have sorted the 5 best bitcoin margin exchanges based on their features as follows:
1. Binance margin trading.
Bitcoin margin trading at Binance is basically spot trading with borrowed funds and increased risks. Binance is the world’s biggest crypto exchange in terms of volume, and hence you get the industry’s best features.
Bitcoin margin trading at Binance comes with many features like isolated margin trading, cross margin trading, margin level, and maintenance margin.
Isolated margin at Binance.
An isolated margin allows traders to limit the risk by restricting the amount of margin at each position. This way, if your funds liquidize, then you lose the funds of only that particular position.
In isolated margin trading, you get leverage of 10x, which is based on a tier system depending on your user level. Whereas cross margin offers maximum leverage of 5x in the master account and 3x in a regular account.
The function of tiered leverage in isolated margin.
Tiered leverage automatically adjusts your leverage based on your borrowed funds. This implies that leverage for isolated margin trading is dynamic. You can have a look at the risk ratio for 10x isolated margin in the table below:
Tier Liquidation Risk Ratio Pre-liquidation Ratio Margin Call Ratio Initial Risk Ratio Effective Multiple (leverage) 1 1.050 1.070 1.090 1.111 10 2 1.061 1.081 1.101 1.127 8.90 3 1.072 1.092 1.112 1.142 8.04 4 1.083 1.103 1.123 1.157 7.35 5 1.094 1.114 1.134 1.173 6.79 6 1.106 1.126 1.146 1.188 6.31 7 1.117 1.137 1.157 1.204 5.91 8 1.128 1.148 1.168 1.219 5.56 9 1.139 1.159 1.179 1.235 5.26 10 1.150 1.170 1.190 1.250 5.
To know more about the function of tiered leverage in isolated margin trading, Binance you can click here .
Cross margin trading at Binance.
You share your entire asset balance across all the open positions in your margin account. It is so to prevent liquidations, as other positions can aid the position in loss. It is most popular among professional traders and investors who are hedging existing positions.
There is no fee for depositing funds; however, bitcoin all the users pay a fee at withdrawal. You can have a look at the margin interest rate for all the assets by clicking here or in the table below:
By using BNB
, you can reduce your trading fee by 25%.
Getting started with Binance Marging Trading.
You may follow these steps to begin bitcoin margin trading at Binance :
First, you have to sign-up and complete your verification at Binance . Then deposit funds into your account. Now go to your account dashboard and click on margin. Then complete create your margin account. Transfer funds to your margin account. Now you can go long or short from the margin tab.
Pros and cons.
Pros Cons Binance offers both isolated and cross-margin trading. Binance can be overwhelming for new users. All your margin orders go in the spot market. They don’t support most traditional payment methods. Binance is the world’s biggest exchange and hence uses industry-leading security protocols.
2. Bityard margin trading.
Bityard is one of the best bitcoin margin trading platforms in the market. They operate with isolated margin trading, which helps you keep your entire fund safe during liquidation. Bityard is a Singapore-based exchange and provides its services in over 150 countries.
What is isolated margin trading at Bityard?
Bityard provides you its leverage services through isolated margin trading. Isolated margin trading allows you to use funds separately for each position. In the case of liquidation, you lose funds of only that particular position.
Leverage at Bityard.
Bityard provides you a leverage of up to 125x on crypto margin trading and 200x on derivatives margin trading. You can adjust leverage from the leverage slider.
Bityard charges you a fixed price on margin trading at the time you open a position. The following formula calculates the margin trading fee:
(Opening/ Closing fee = Margin * Leverage * 0.05%)
Getting started with Bityard Margin Trading.
To begin with bitcoin margin trading at Bityard , you can follow these steps:
Create your account and complete your email verification. Transfer funds to your Bityard Now visit the crypto margin trading from the contract tab in the header. You can now start margin trading.
Bityard Margin Trading: Pros and cons.
Pros Cons They provide a customizable and easy-to-use interface. There is a minimum trading amount of 5 USDT. They have a market-competitive trading fee. OTC deposits are available only in select countries. They own financial licenses from four different countries.
3. Kraken margin trading.
Kraken is a US-based cryptocurrency exchange providing its services in over 175 countries. Kraken margin trading lets you magnify your trades by letting you use more complex trading strategies.
Leverage on Kraken.
Kraken provides minimum leverage of 2x and maximum leverage of 5x.
Going long or short at Kraken.
You can open a position at a lower price and then close it at a higher price; else, you can open it at a higher price and close it at a lower price. The former is going ‘long’ and the latter going ‘short.’
Going long works with or without margin; however, going ‘short’ only works with margin trading.
Kraken charges an opening fee and a rollover on its margin orders. The opening fee is 0.02% for almost all the assets, and the rollover fee is 0.02% for all the assets. The opening fee is one time per order, whereas you pay a rollover fee every 4 hours.
You can click here to have a detailed insight into the fee charged.
Getting started with Kraken Margin Trading.
You can follow these steps to get started:
Sign-up and create your account at Kraken . Deposit funds in your Kraken margin trading account. Now click on margin from the header. Set the leverage, place an order and begin trading.
Kraken Margin Trading: Pros and cons.
Pros Cons Trading at Kraken is beginner-friendly. The exchange provides a maximum leverage of only 5x. They are one of the most secure platforms and own a US license. They own a slow procedure of verification of new users for intermediate and pro-level accounts. They charge a low fee on leveraged trades.
4. BitMEX margin trading.
BitMEX is an exchange platform based in Seychelles which offers a fast and secure platform for crypto traders. The platform provides BitMEX futures and swaps on their platform.
Leverage on BitMEX.