To take a loan from the exchange, the trader must leave her a deposit. If the trader incurs losses, the exchange takes the amount due to it from the pledge. From these $ 6,000 we subtract the $ 1,000 that you put into your account = $ 5,000 profit. The use of the High volume Bitcoin mixer is there.
An example of margin trading in plus
And what will happen if the bitcoin, on which hopes were set, on the contrary, becomes cheaper?
If losses reach a critical value, the exchange sends a so-called margin call – a warning to the user. If the losses still exceed the security deposit, the exchange will automatically begin to close the trader’s position.
Futures trading
As in the traditional stock market, the cryptocurrency market is represented by trading with futures and other derivatives.
So, bitcoin futures are contracts for the purchase/sale of BTC at a certain price in the future. Futures, options, swaps and other types of contracts are called derivatives, or derivatives.
Types of financial instruments
Example Bitcoin Futures Chart:
Bitcoin Futures Example
- As you can see from the chart, sometimes the futures price can almost come close to the spot price.
- Sometimes it can move much higher than the spot price.
- And in some cases below.
The first Bitcoin futures with an expiration date were offered by major players in the traditional market CME and CBOE exchanges from Chicago during the cryptocurrency boom of late 2017 early 2018. Today, cryptocurrency exchanges themselves also offer this.
What does “expiration date futures” or futures mean?
This means, on a certain date, the buyer must buy, and the seller must sell the asset in the agreed amount. Such futures are called deliverables. For example, they plan to introduce the Bakkt platform.
There is another kind of derivatives futures settlement. There is no need to supply the asset itself (Bitcoin) and you can simply speculate on its price.
Futures classification
Perpetual futures are distinguished from urgent futures by the absence of a clearly specified delivery or settlement date.
Site Tips
Cryptocurrency exchanges are not as clearly regulated as CME and CBOE, so it is wise to approach the choice of a trading platform. It is also worth considering the size of leverage, interest on loans and other parameters.
Several criteria for choosing a site:
- Existence of technical analysis tools at the exchange, reflecting market movements.
- Functionality: support of various types of orders, stop loss and take profit options, etc.
- Sizes of commissions, support for depositing and withdrawing funds both in fiat and in cryptocurrency.
- Exchange trading volumes and the correlation of cryptocurrency intra-exchange prices with market averages.
Binance bidding page
Binance is a leading cryptocurrency trading volume led by renowned digital money supporter Changpen Zhao. The exchange began work in 2017, and in July 2019 launched a platform for margin trading and futures. The interface of the updated Binance is designed in such a way that users can access regular and margin trading in one window.
Binance order window
At the time of launch, there are available for margin trading: BTC, ETH, XRP, TRA, USDT and BNB – own Binance token. Traders can transfer funds from their margin wallets to standard exchange wallets without commissions. The daily lending fee is 0.02%. The exception is BNB, for which the rate is higher 0.1%. Binance also does not issue loans in its own token.