CryptoTicker: Top 3 Platforms for Margin Trading in 2022
The crypto market is highly volatile where ups and downs could be as high as 30% to 50% of the asset value. Meaning, if an asset is $100 today, it can go as high as $150 to even $200 the next day or come down crashing to even $20 or $30. Such sharp volatility makes the crypto market a perfect hub for margin trading.
In margin trading, the trader can trade with borrowed money from the exchange. Usually, the trader has to open a futures contract and pick the leverage range as per their farsightedness and speculations. For example, if trader A thinks that Bitcoin will be $1000 per coin and he has $100 with him.
He can open the futures contract/ margin trading and bid for an uptrend for BTC at the time of contract expiration. So, if he has said that within 7 days, BTC will be priced at $1500, if that happens, trader A will make a profit on the appreciated value of the BTC.
However, if the price falls, he will have to either close his position or fund the contract to prevent liquidation. So as you see, leverage trading gives ample earning opportunities to traders with limited income but it can also cause severe losses for wrong predictions. Therefore one must be cautious in picking the right platforms that support margin trading with limited fees to enter the contract. In this article, we shall see a few top platforms where you can trade crypto with leverage at a marginal cost.
Top Platforms to Trade Crypto With Leverage
#1 Binance
Undoubtedly, this name makes sense in the list of top exchanges for margin trading because of its high trading volume and liquidity. Binance’s UI and UX are very simple for margin trading. With just a few clicks, a trader can open the margin contract and trade cryptos with leverage. On top of this, to safeguard users’ trading experience, Binance also maintains a margin insurance fund to protect its overall liquidity. This gives the traders a chance to capitalize on their gains as and when required without any glitch like funds not being available or contract cannot be closed at the moment.
Furthermore, on Binance, a trader can experience margin trading at 10x leverage on the spot market and 125x on the derivative market which can maximize their yields significantly. There’s another upside on Binance when traders use the BNB tokens to pay for the margin trading interest. For using the BNB, a flat 5% interest would be waived off while making the payment. In addition to this, suppose users do not want to expose themselves to margin trading but they need the same upside of margin trading. For that need, they can trade in leveraged tokens. Using the leveraged token, a trader can short an asset without the compulsion to margin trade.
#2 FTX
Like Binance, FTX has also integrated smart features like 3 Tier liquidity to support margin trading making the exchange feature on this list. The 3 Tier liquidity allows risk coverage from the market, commodity, and foreign exchange safeguarding margin traders. On top of this, there’s also a provision for sub-account operations where a specific wallet facilitates such trades. FTX furthermore allows users to enjoy leverage up to 101x on the product on which they want to speculate.
As far as the lending and borrowing rates are concerned, borrowers need to generally pay more margin rates in comparison to the lenders on FTX while margin trading.
#3 Kraken
Kraken is another noteworthy mention on this list when it comes to margin trading. The exchange allows 5x leverage on assets and supports BTC, ETH, XTZ, Dash, ADA, ETC, Link, XMR, BCH, EOS, USDC, REP, and LTC. In order to filter operations, Kraken follows strict eligibility criteria for traders to enter margin trading. For a regular trader, it is mandatory to hold 10 million invested across multiple assets.
In those 10 million, the investor cannot include their house or other assets that do not form a part of their crypto investment portfolio. As far as the fees are concerned, Kraken charges 0.01% as an opening fee and 0.01% for every 4 hours as a rolling fee for perpetual margin contracts.
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