Best Bitcoin and Crypto Margin Trading Exchanges

Ready to delve deeper into the world of crypto margin trading? Let’s get to it!

Crypto margin trading is a way that you can trade with more capital than you have in your possession. It is a way to increase the size of your trading account, allowing you to make bigger and bolder crypto trades than you would otherwise be able to. 

If you’re interested in getting started with crypto margin trading, this guide has everything you need to know.

We’ll explore the best crypto margin trading exchanges out there, allowing you to choose the right one for you. We’ll also answer all your key questions about crypto margin exchanges so you can make a truly informed choice.

What Is Crypto Margin Trading?

Before we explore the best crypto margin exchanges out there, and equip you with the strategies and tactics you need to be successful, let’s cover the basic concept of crypto margin trading and what it means.

In order to be knowledgeable in this area, there are three key concepts you need to grasp:

  • 1Margin Loan
  • 2Trade Leverage
  • 3Liquidation Price

Let’s take a look at each of these in turn.

Crypto Margin Trading Key Terms – Margin Loan

The term margin loan refers to the amount of funds that is lent to the trader by the crypto exchange or broker in order to carry out margin trades. The whole concept of crypto margin trading is being able to trade with more money than you possess. The extra amount exists in the form of a margin loan made between broker/exchange and trader.

Crypto Margin Trading Key Terms – Trade Leverage 

The term trade leverage refers to the multiplier amount of the trade taking place. This usually starts at 2x the amount of actual capital being traded, and can range all the way up to 100x multiplier. The greater the leverage, the larger the amount of potential gain, but also the level of risk. 

Crypto Margin Trading Key Terms – Liquidation Price

Of course, not every trade is successful, and the broker/exchange needs a way of protecting their potential losses. In order to protect against the downside of crypto margin trades that don’t work out as intended, the exchange sets a liquidation price. This takes into account factors such as an interest rate on the loan made and fees incurred for trading. 

Comparison Of Crypto Margin Exchanges

 ExchangeLeverageKey FeatureTrade
Binance20xFutures: ---

Derivatives: ---

Fees: 0.1% taker fee
Trade
Bitmex100xFutures: YES

Derivatives: YES

Fees: 0.075% taker fee
Trade
EtoroFutures: YES

Derivatives: NO

Fees: $50
Trade
PrimeXBT100x Futures: NO

Derivatives: NO

Fees: 0.01%-0.05%
Trade
CEX IO3xFutures: ---

Derivatives: ---

Fees: 0.02% taker fee
Trade
XENA100xFutures: ---

Derivatives: ---

Fees: 0.00%
Trade
PLUS 500Futures: ---

Derivatives: ---

Fees: ---
Trade
Bithoven20xFutures: ---

Derivatives: ---

Fees: ---
Trade
Deribit100x
(futures)
Futures: YES

Derivatives: NO

Fees: Starting at 0.5%
Trade
Bybit100xFutures: ---

Derivatives: ---

Fees: 0.0750% taker fee
Trade
Huobi3xFutures: ---

Derivatives: ---

Fees: 0.2% taker fee
Trade
Overbit50xFutures: NO

Derivatives: YES

Fees: 0.00%
Trade
BaseFEX100xFutures: NO

Derivatives: NO

Fees: -0.02%-0.07%
Trade
Monfex50xFutures: ---

Derivatives: ---

Fees: 0.00%
Trade
Bluebelt6.67xFutures: ---

Derivatives: ---

Fees: ---
Trade
Delta100xFutures: ---

Derivatives: ---

Fees: ---
Trade
Bibox50xFutures: NO

Derivatives: NO

Fees: 0.025%-0.075%
Trade
Bitfinex100xFutures: ---

Derivatives: ---

Fees: 0.2% taker fee
Trade
Kraken5xFutures: ---

Derivatives: ---

Fees: 0.02% taker fee
Trade
Poloniex2,5xFutures: ---

Derivatives: ---

Fees: 0.2% taker fee
Trade
CoinbaseFutures: ---

Derivatives: ---

Fees: 1.49%-3.99%
Trade
OKCoin3xFutures: YES

Derivatives: NO

Fees: 0.00%-0.10%
Trade

What Are The Best Crypto Margin Exchanges?

There are a wide range of different crypto margin exchanges out there, and it can be difficult to know which are worth your time. Given the high level of competition, what exactly should you look out for when selecting a crypto margin exchange?

Some of the factors to take into account when choosing the right crypto margin exchange for you include:

  • Leverage. How much leverage is offered on a particular exchange? Do you qualify for the level of leverage you need?
  • Liquidity. What is the level of liquidity found in any given exchange?
  • Trading Options. There are a wide range of different crypto trades out there. What types of trades can you execute on a given crypto margin exchange? Does the selection on offer meet your particular needs? 
  • Fees. The interest rates and fees found differ from exchange to exchange. How much will it cost you to use any particular exchange? How does this compare to the other options out there? Are you happy with the costs you will incur?

Ultimately, the best crypto margin exchange for you is the one most suited to your particular requirements. Perhaps you’ll be willing to pay more in fees for greater leverage, for example. Or perhaps you’re looking for the lowest levels of fees possible. 

In order for you to make the smartest choice, we’ve assessed the key pros and cons to some of the most popular crypto margin trading exchanges out there.

BitMEX – Best Crypto Margin Trading Exchanges – Pros and Cons

BitMEX has been in operation for over five years, and has made a name for itself as one of the most prominent crypto margin exchanges out there.

So what are some of the key advantages and disadvantages to using BitMEX as your crypto margin trading exchange?

Advantages of BitMEX Crypto Margin Trading Exchange

  • Excellent levels of leverage. BitMEX offers you up to 100x leverage multiplier, allowing you to make seriously large trades.
  • Great variety of cryptocurrencies. If you’re interested in trading some of the more obscure cryptocurrencies out there, BitMEX has got you covered.
  • Manageable verification requirements. BitMEX does not have as strict and annoying verification processes as some other exchanges.

Disadvantages of BitMEX Crypto Margin Trading Exchange

  • No US sign ups allowed. If you are a US citizen, BitMEX is not available to you.
  • Subpar UI. The experience of using BitMEX is a little more complex than found in some other exchanges.
  • Lack of Fiat. If you want to make Fiat trades, BitMEX is the wrong exchange for you. 

BitMEX Crypto Margin Trading Exchange – Overall Verdict

Overall, BitMEX is well worth your attention if you are looking to carry out crypto margin trades and you are not a US citizen. 

BitMEX offers some of the best levels of leverage in all the exchanges out there. It is advised that you have some background or familiarity with leveraged trading, as it isn’t necessarily the most user friendly exchange for newcomers.

BitMEX is an exchange you can trust. A fantastic choice for those with a little bit of knowledge and experience in making leveraged trades.

EToro – Crypto Margin Trading Exchanges – Pros and Cons

eToro has proved itself to be a massively popular online trading platform, having been in business for over 13 years at the time of writing. eToro is a superb choice if you are looking to make a wider variety of trades than only crypto.

eToro is a longstanding platform with a great reputation. It is known for its innovative approach to trading, such as its focus on social trading.

So what exactly are the key benefits and downsides to choosing eToro as your choice of crypto margin trading exchange?

Advantages of eToro Crypto Margin Trading Exchange

  • Wide range of trades. If you’re interested in trading more than just crypto, eToro has got you covered. The platform offers currencies, stocks and shares, and commodity trading in addition to crypto margin trades.
  • Social. eToro is very much a modern trading platform in the sense that it offers the ability to focus on social trading. See what other traders are doing and learn from their strategies and approaches. 
  • Trustworthy. eToro is one of the major names in trading platforms. They have earned their reputation, and their prominent profile is evidenced by their wide range of major sponsorships. 

Disadvantages of eToro Crypto Margin Trading Exchange

  • Withdrawal. You need to withdraw at least $50 to extract your funds from the eToro exchange. This won’t be a problem for most traders, but is something to keep in mind if you are looking to trade lower amounts. 
  • Low Leverage. If you are making crypto margin trades, you are limited to a 2:1 ratio. This is a serious downside when compared to other platforms that offer up to 100x leverage.
  • Fees. The fees found in eToro are larger than elsewhere, and even include a $25 fee for withdrawing your money from the eToro platform.

eToro Crypto Margin Trading Exchange – Overall Verdict

Overall, eToro is an excellent choice of exchange if you are interested in making a wide range of trades. You can trade Forex and commodities as well as crypto. Traders will also be attracted to the excellent reputation eToro has built for itself over its many years of operation.

The downsides to using eToro are the leverage limits on crypto trading. The fees to use the platform and the withdrawal levels might also put off some smaller traders.

If you’re looking to execute a wide variety of trades, and aren’t looking to leverage your crypto trades, then eToro is an exchange you should definitely check out in more detail.

Bitfinex – Crypto Margin Trading Exchanges – Pros and Cons

Bitfinex has been going strong for over seven years at this point, and has made a name for itself thanks to its high levels of liquidity and innovative features.

As you can tell by its name, Bitfinex is a trading platform with a strong focus on crypto. It has an especially strong reputation for its Bitcoin and Ethereum trading options. 

If you’re thinking of trading on the Bitfinex platform, what are the key pros and cons you need to know?

Advantages of Bitfinex Crypto Margin Trading Exchange

  • Volume. When it comes to major assets, Bitfinex has a truly superb volume.
  • P2P options. One of the innovative options found with Bitfinex is the chance to benefit from peer to peer financing. This is a modern financing method which helps to make trading on the Bitfinex platform more inclusive than would otherwise be the case. 
  • Order types. If you want to feel unrestricted in terms of the orders you can execute, Bitfinex is a trading platform you should definitely check out. It has one of the widest range of order types out there.

Disadvantages of Bitfinex Crypto Margin Trading Exchange

  • Past mishaps. In the past, Bitfinex has experienced some issues with its security. This have been ironed out, but it is still a blot on Bitfinex’s record which will deter some traders from this platform in particular.
  • Low leverage. If you are looking for high levels of leverage, Bitfinex is the wrong trading exchange for you. There is a maximum level of 3.3x leverage, which is a lot lower than the 100x found elsewhere.
  • Restricted purchase options. If you are seeking the widest range of purchase options out there, Bitfinex isn’t the exchange for you. It has a more limited range of purchase options than found on some other exchanges.

Bitfinex Crypto Margin Trading Exchange – Overall Verdict

The 3.3x maximum amount of leverage offered won’t be right for every trader, but if you are looking to get started with a fairly limited level of leverage, then you might find this works to your advantage.

The security issues that Bitfinex has had in the past have largely been fixed, but this will deter some of the more cautious users from using the Bitfinex platform. However, the company have made serious security improvements, and have put measures in place to prevent the past problems from reoccurring. 

Bitfinex is a good choice if you are looking to trade a wide variety of cryptocurrencies, and want to benefit from the innovative peer to peer financing options offered by the platform.

Kraken – Crypto Margin Trading Exchanges – Pros and Cons

Kraken is one of the more established names in the world of crypto margin trading. The platform has been in operation since 2011, and has undergone a range of evolutions and improvements since its initial launch. 

So what are some of the key positives and negatives to choosing Kraken as your choice of crypto margin exchange?

Advantages of Kraken Crypto Margin Trading Exchange

  • Leverage. Kraken doesn’t offer the highest levels of leverage out there, but its 5x leverage is more than enough for many traders. This leverage amount is also higher than found on many other exchanges.
  • Fees. The fees charged by Kraken for using their platform are lower than some rivals. This makes it a good choice if you are looking to limit your trading costs.
  • Liquidity. The liquidity levels on the Kraken platform are truly excellent for the vast majority of tradable assets. 

Disadvantages of Kraken Crypto Margin Trading Exchange

  • Customer service. Some traders have reported a frustrating experience when using the Kraken customer support services. 
  • Verification. Some of the strictest and most demanding verification requirements of all the platforms out there.
  • Pairs. If you are looking to trade crypto pairs, Kraken has a relatively poor selection.

Kraken Crypto Margin Trading Exchange – Overall Verdict 

So what’s our overall advice regarding Kraken as a crypto margin trading exchange?

Some of the features that make Kraken well worthy of your attention include its superb security record, international accessibility, and great levels of liqudity.

You might be put off using Kraken by its verification requirements, but by the same token, its strict approach to security also makes it a platform you can trust.

A good choice of crypto margin trading exchange for traders who want an average level of leverage, and for who security is paramount.

Poloniex – Crypto Margin Trading Exchanges – Pros and Cons

Poloniex is a name that is synonymous with crypto trading. Why? Of all the many crypto margin trading exchanges out there, Poloniex was one of the first to offer leveraged margin trading.

Its longstanding provision of margin trading means that Poloniex has a lot of experience that other exchanges doesn’t. This makes it particularly attractive for traders.

So what exactly are the key things you need to know about Poloniex before getting started and funding your trading account?

Advantages of Poloniex Crypto Margin Trading Exchange

  • Fees. If you are looking to limit the cost of your trading, then Poloniex is a great choice. It offers far lower fees than found on many other exchanges, allowing you to keep more of the money you make. 
  • Margin trading focused. As one of the first exchanges to offer and popularize the concept of margin trading in relation to crypto, Poloniex has a great reputation within this particular area of crypto trading.
  • Altcoins. If you are looking for one of the best choices of altcoin out there, Poloniex is the exchange for you. A truly impressive range.

Disadvantages of Poloniex Crypto Margin Trading Exchange

  • Liquidity. Compared to some other exchanges, Poloniex has relatively low levels of liquidity for some assets. It’s worth checking the liquidity level for a particular asset you are looking to trade. 
  • USA customer restrictions. If you are a crypto trader from the USA, you will not be able to carry out margin trades with Poloniex. 
  • Know Your Customer. Poloniex insists on ‘know your customer’ regulations for all traders. This might be a problem depending upon your needs. 

Poloniex Crypto Margin Trading Exchange – Overall Verdict

Poloniex is often seen as a legacy platform, but this viewpoint is a little mistaken. Its still an exchange that strives to improve and innovate, offering a better experience to traders as time goes on. 

If you are looking to limit the cost of your crypto trading activity, Poloniex is a fantastic choice. You will pay far lower fees than are found elsewhere. 

Poloniex is its range of different cryptocurrencies on offer. At the time of writing, the platform offered over 50 different options.

Advantages of Binance Crypto Margin Trading Exchange

  • Basic and Advanced Views. You can change the complexity of the Binance interface to match your level of familiarity with trading. Both interfaces are clear and provide the essential data you need.
  • Good range of trading options. A wide range of cryptocurrencies available to trade, including Bitcoin, Ethereum, Dash, and Ripple. Support for tokens resulting from ICO listings. 
  • Special Competitions. If you want the chance to win luxury prizes, such as Maseratis and iPhones, Binance runs contests where this is possible. 

Binance – Best Crypto Margin Trading Exchanges – Pros and Cons

Binance, originally based in Hong Kong, has been in operation for a couple of years. It’s known for its crypto only operation, with no Fiat traded.

If you’re thinking about trading on Binance, check out our guide to the advantages and disadvantages of this crypto margin exchange. 

Advantages of Binance Crypto Margin Trading Exchange

  • Basic and Advanced Views. You can change the complexity of the Binance interface to match your level of familiarity with trading. Both interfaces are clear and provide the essential data you need.
  • Good range of trading options. A wide range of cryptocurrencies available to trade, including Bitcoin, Ethereum, Dash, and Ripple. Support for tokens resulting from ICO listings. 
  • Special Competitions. If you want the chance to win luxury prizes, such as Maseratis and iPhones, Binance runs contests where this is possible. 

Disadvantages of Binance Crypto Margin Trading Exchange

  • Verification. If you have a problem completing the full KYC (know your customer) verification process, then Binance is not the best choice of exchange.
  • Limited Support. If you want to be able to receive telephone support for your crypto margin trading exchange account, it isn’t possible with Binance. You can submit support tickets instead.
  • Regulation. Binance has diversified its base location several times due to regulatory compliance. This can be seen as a positive move, but it might unsettle some traders.

Binance Crypto Margin Trading Exchange – Overall Verdict 

If you’re looking for a crypto margin trading exchange with a good range of coins, token support, and an admirable approach to security, Binance is definitely worth looking at.

Although Binance has been faced with the same security challenges as most other exchanges, the company has responded better than many competitors. This should give you confidence about their exchange.

Overall, Binance is a great choice of crypto margin trading exchange for both begginer and advanced traders.

Cex.io – Best Crypto Margin Trading Exchanges – Pros and Cons

Cex.io is a crypto exchange that has been in operation for over six years. The company originally existed as a mining service, but is now a full trading exchange.

Should you use Cex.io to trade crypto? 

Read on to discover the advantages and disadvantages to this crypto margin trading exchange.

Advantages of Cex.IO Broker Crypto Margin Trading Exchange

  • Track Record. One of the key concerns when choosing a crypto margin exchange is the company’s reputation. Cex.io has a good track record of reliable performance. This definitely isn’t a fly by night operation.
  • Location. Unlike some other exchanges, Cex is registered and operated from some of the most respectable business locations out there, including London. 
  • Account Levels. When it comes to creating a crypto trading account, there isn’t any such thing as a ‘one size fits all’ account. Cex.io recognizes this and offers different account levels. Lower level accounts have very quick verification processes and times. 

Disadvantages of Cex.IO Broker Crypto Margin Trading Exchange

  • Fees. If you are looking for the lowest levels of fees possible, Cex.io isn’t the most suitable exchange out there. The fees are slighter higher than found on some other exchanges, but are by no means excessively high. 
  • Support. Some exchanges offer a really wide level of support options, including live chat and telephone support. If you’re looking for the full range of support options, Cex.io isn’t the best exchange for you. 
  • Limited US Access. Are you looking to trade crypto from the US? If so, check to make sure Cex.io supports your state. There is support for some US states, but by no means the full range. 

Cex.IO Broker Crypto Margin Trading Exchange – Overall Verdict

In exchange for the excellent service provided by Cex.io you will pay slightly higher fees than are found at some other exchanges, so if you are looking for the lowest fees possible, this might not be the right exchange for you.

The different account levels are an appealing option, allowing you to get started trading crypto quickly with a low level of verification. 

Cex.IO is a great choice of crypto margin exchange. The company behind it is reputable and has a track record of providing excellent facilities for crypto margin exchanges.

Xena – Crypto Margin Trading Exchanges – Pros and Cons

One of the newer entrants on the crypto scene is the Xena Crypto Margin Trading Exchange. 

Xena is one of the more advanced crypto exchanges out there, being particularly suitable for corporate and advanced traders. 

Read on to discover our key pros and cons to the crypto margin trading exchange, and our verdict on whether it’s worth your attention or not. 

Advantages of Xena Crypto Margin Trading Exchange

  • Speed. Xena boasts the fastest trading speed in the entire crypto world. With an asset class such as cryptocurrency, where the price is very volatile, even fractions of a second can make a huge difference. 
  • Fees. If you’re looking to keep more of the profit you make from trading, Xena is a good choice of exchange. The fees are far lower than found at many other exchanges. 
  • Corporate. One of the specialisms of the Xena exchange is in corporate trading. If there is the type of crypto trading you wish to perform, you should definitely check out Xena. 

Disadvantages of Xena Crypto Margin Trading Exchange

  • Lack of US Support. Like many other crypto exchanges, Xena does not support access for US customers. If you’re trading crypto and based in the United States, look elsewhere. 
  • Advanced. This isn’t a crypto exchange for newcomers. You need to have some level of experience to achieve the best results on the Xena platform.
  • New. Xena has been in operation for under two years at the time of writing. If you are looking for an exchange with a longer track record, Xena might not be the best choice. 

Xena Crypto Margin Trading Exchange – Overall Verdict

For a relative newcomer to the world of crypto margin trading, Xena is very impressive. It is one of the most attractive options out there for serious crypto traders, thanks to its combination of low fees and fast trading technology. 

However, if you’re an experienced or corporate crypto trader, Xena is definitely worth checking out. 

If you’re new to the world of crypto, or based in the USA, Xena might not be the best choice.

Plus500 – Crypto Margin Trading Exchanges – Pros and Cons

Plus500 has earned its reputation as a top trading platform, offering a wide range of assets, including cryptocurrency. 

If you’re thinking of creating an account on Plus500, check out our rundown of the pros and cons of this platform.

Advantages of Plus500 Crypto Margin Trading Exchange

  • Instrument Range. While some exchanges offer the ability to trade only crypto, Plus500 offers a lot more. It’s a similar exchange to eToro, in the sense that you can trade a lot of different asset classes. 
  • Leverage. One of the key attractions of margin trading is the ability to execute leveraged trades. If you’re looking for great levels of leverage, Plus500 is one of the best exchanges out there. 
  • Platform Diversity. Due to the fluctuations in crypto value, you never know when the right time to execute a trade will come around. Plus500 offers trading platforms on both desktop and mobile devices, so you can easily trade no matter where you are.

Disadvantages of Plus500 Crypto Margin Trading Exchange

  • Deposit Amount. The deposit amount found at Plus500 is higher than at many other exchanges. If you’re looking to start trading with the lowest initial outlay possible, Plus500 might not be the best choice.
  • Lack Of Hedging. Hedging is one of the most effective crypto trading strategies, despite being prohibited by many exchanges. If this is an approach you definitely want to pursue, Plus500 isn’t the right place for you. 
  • Inactivity Fee. If you let your Plus500 account remain dormant for a period of time, you will be charged an inactivity fee.

Plus500 Crypto Margin Trading Exchange – Overall Verdict

Plus500 is somewhat similar to eToro, as it allows you to trade a wide range of different assets, opening up a world of possibilities both inside and outside of crypto. 

If you’re looking to trade on an occasional basis, or make only a low level initial deposit, Plus500 might not be suited to your needs. However, if you’re looking for a versatile and proven trading platform, definitely check out Plus500.

If you’re looking for an established trading platform, with a wide variety of asset types, Plus500 is an excellent choice.

Bybit- Crypto Margin Trading Exchanges – Pros and Cons

Bybit is one of the newer players in the world of crypto margin trading, having launched back in 2018. Despite its relatively young age, the company has some serious prestige and technological clout behind it. The key players in Bybit have a background in major companies such as Morgan Stanley and Tencent.

So is Bybit a good choice of crypto margin trading exchange or are you better off trading crypto on another platform?

Advantages of Bybit Crypto Margin Trading Exchange

  • Leverage. One of the key factors in choosing a crypto margin trading exchange is the levels of leverage on offer. If you are looking for the highest levels of leverage, you should consider Bybit. Depending on the value of the position being traded, you can enjoy up to 100x leverage levels.
  • Support. Not every crypto margin trading exchange out there offers excellent support services. Thankfully, Bybit does. You can either engage in live chat to get your issue sorted as quickly as possible, or even reach out through social media.
  • Fees. One of the things that can hurt your profits when crypto margin trading is the withdrawal fees. Bybit charges a lower withdrawal fee than the industry average, allowing you to keep more of your gains

Disadvantages of Bybit Crypto Margin Trading Exchange

  • Deposits. If you’re looking to deposit using Fiat, Bybit isn’t the right exchange for you. You will need to deposit crypto directly, meaning you need to have a holding somewhere else to get started trading on Bybit.
  • Age. Bybit has been in operation for just over a year at the time of writing. While older doesn’t always equal better, if you’re looking for a crypto margin trading exchange with a long track record, you might want to look elsewhere.

Bybit Crypto Margin Trading Exchange – Overall Verdict

In total, Bybit is a good choice of crypto margin trading exchange if you’re looking for good levels of leverage, a wide range of different support choices, and a company run by names from major players in the world of tech and finance.

If you’re looking to deposit in fiat, Bybit isn’t the right choice of exchange for you. But if you already hold some crypto elsewhere, and are looking for a new place to trade it, Bybit is definitely worth checking out.

What Are The Benefits Of Crypto Margin Trading?

Now that we’ve covered the fundamental info you need to know about crypto margin trading, and provided you with insight into some of the top platforms out there, let’s consider the benefits of crypto margin trading.

After all, there are a wide range of different types of trading out there. What are some of the main reasons you should invest your time and money into crypto margin trading?

  • Profits. The leveraged nature of crypto margin trading means you can potentially make a lot more profit with the amount of money you actually have, thanks to the leveraged loan. The exact level of leverage you use will depend upon your appetite for risk, as well as the limits set by your exchange. With potential leverage of up to 100x, the potential is vast to make some serious profit with this type of trading. 
  • Shorting. If you’ve been around the world of crypto trading for any amount of time, you will be well aware that things can take a nosedive. The ability to short various cryptocurrencies on crypto margin exchanges means that you can make a profit even when the value of crypto dips.
  • Safety. The nature of the margin loan means that the risk is clear and limited for both parties, This can avoid you getting into unexpected situations.

What Are The Downsides Of Crypto Margin Trading?

  • Quick losses. Just as leveraged trading means that you can make vast amounts of profit quickly, you can also make quick losses. If the crypto market makes a sudden downturn, you might find that the leveraged nature of your losses leads to your position being automatically closed quite quickly. 
  • Fees. Outside of the world of leveraged trading, fees tend to be quite straightforward, being charged for each trade executed. In the world of leveraged crypto margin trading, additional fees come into play. By borrowing the amount needed for your position, you will often incur a percentage fee on the amount borrowed. This is sometimes charged each day that the borrowing takes place. It’s vital to keep an eye on the fees so that you know exactly how much you will be making and paying at any given moment. 

Which Strategies Can I Use In Crypto Margin Trading?

Like any type of serious trading, it pays to have a good strategic approach before getting started.

This is especially true in the world of crypto margin trading. Conventional stocks and shares tend to move in a lot more conservative ways than crypto. Cryptocurrencies are prone to lose or gain massive amounts of value in a short space of time.

The extremely high level of volatility found in crypto trading, when compared to other types of trade, means that there is serious potential to make large levels of profit (or loss) quickly. 

It is therefore essential to have a solid strategy in mind before you get started with crypto margin trading. 

So what are some of the key strategies you may wish to consider

Crypto Margin Trading Strategy – Long Position

Basically, taking a long position in an asset, including a cryptocurrency, means that you expect the value of that asset to increase in the future. 

You are effectively predicting that the price of the cryptocurrency will be greater at some point in the future than it is now. 

A leveraged long position allows you to experience a far greater rate of profit from this increase than you would if you made an unleveraged long trade.

Say, for example, you took a long position in a cryptocurrency that was currently worth $1000. At the time you closed your position, the price had increased by 50% to $1500. 

If you had made an unleveraged trade, and had invested in a single unit of this cryptocurrency, your profit would be $500.

However, let’s say you had made a leveraged trade at 10x. This would have allowed you to buy $10,000 worth of the cryptocurrency despite only investing $1000 of your actual money. At the time of sale, you would have sold at $15,000, meaning you made a $5000 dollar profit in the same period of time, without spending a penny more of your own money. This doesn’t take into account fees and other unavoidable costs.

Crypto Margin Trading Strategy – Short Position

Short positions involve betting that the value of a cryptocurrency will decrease. 

Let’s say, for example, that you have noticed a pattern in cryptocurrency value. It tends to fluctuate fairly predictably, rising in value by 20% before dropping in value by the same amount.

If you felt sure that the price of the cryptocurrency was about to dip, you would open a short position. This would result in your profiting if the cryptocurrency price fell as you had anticipated.

By making a leveraged short trade, you are able to short a larger amount of the crypto than if you were restricted to your own funds. This allows in a higher level of profit. 

Crypto Margin Trading Strategy – Hedging

Hedging is a crypto margin trading strategy which seeks to protect you from loss.

Say, for example, that you had a long position in a particular cryptocurrency, and you felt fairly sure that its value would rise over a period of time. 

However, you are well aware of the volatile nature of the crypto market. Although you expect the price to rise in the long run, you are well aware that it could dip in the short term. To protect against your losses in such a scenario, you open a relatively small short position in the cryptocurrency. This helps to limit your losses should the crypto lose value before it eventually gains, in accordance with your primary long position.

Most crypto margin trading exchanges don’t allow you to directly hedge. However, there are a couple of ways you can get round this restriction. One is to open conflicting positions in a crypto and currency pairing, using different currencies. For example, you might go long on the value of Bitcoin to the dollar, but short on Bitcoin to the euro. Fluctuations in the currency markets can reduce the predictability of this approach, however. 

The other way to get around restrictions on hedging is to open different positions on different exchanges. For example, you take a long position on one exchange, and a short position on another. This is a more predictable form of hedging which gets around any restrictions from a single exchange platform. 

What Are The Best Tips For Starting Crypto Margin Trading?

At this point in our guide to crypto margin trading exchanges, you are probably ready to get started! You understand the pros and cons of the various trading exchanges, you know the overarching strategies you can employ, and you are eager to take your first position.

However, there’s never any harm in being equipped with more crypto margin trading information!

With that principle in mind, here are our top tips to allow you to start crypto margin trading in the most effective and enjoyable way possible. 

1. Be careful of leveraging.

It can be tempting to go for the highest level of leverage available. After all, the potentially huge profits are one of the main attractions behind crypto margin trading.

However, this isn’t always the best approach. The more leverage you have, the more vulnerable you are. Some exchanges are subject to artificial manipulation of the crypto price in order to hurt overly leveraged traders.

As a guiding principle, if you have experience with leveraged trading of any type, you can afford to take greater levels of risk with the amount of leverage. Also, if the exchange you are trading on has a higher level of liquidity, you can afford to take greater risks in terms of your leverage level. 

2. Only risk what you can afford to lose.

Crypto margin trading is a high risk form of trading. Like everything in life, the high level of risk is accompanied by potentially high rewards. However, it’s definitely possible to lose everything you’ve invested, and the loss can come quicker than you ever imagined. 

As a result of this, it’s vital to only invest an amount you would be OK with losing. Obviously, losing money on a trade will never be a great situation, but if you can afford to absorb the loss then it won’t put you at peril.

You should never rely on profits from crypto margin trading as a primary form of income, or to meet debt ot any other type of obligation.

However, as a way to potentially make epic levels of profit with your disposable income, go for it! If it’s money you can afford to lose, the potential gains and the thrill of trading is more than worth the risk. 

3. Choose your exchange carefully.

The online world if often an unscrupulous place. It’s well worth doing your homework on any given exchange before opening an account.

Not all crypto margin trading exchanges use the same levels or types of security, You want to check out how long any given exchange has been operating, and what its security record is. Has it ever been compromised? What corrective action have they taken to ensure that similar exchanges do not occur?

Do not get drawn in by marketing promises and general popularity. Due diligence about an exchange’s security is your responsibility, and yours alone. Ultimately, the security of your money is far too important to take any shortcuts on. 

Be careful, and trade wisely!

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John Digit
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John Digit

One of the key factors for choosing a crypto margin trading exchange is finding a good fit between the preferences of the trader, and the unique selling points offered by any particular exchange.

I like the focus on the different trading exchanges here, as it allows me to picture which would be a good fit for my own set of

likes and dislikes. I wish the ultimate success to every other crypto trader out there. We are the revolution my friends, and we are not going anywhere.

Steven Brite
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Steven Brite

With the information found here I make much better choices.

I had an opportunity to buy Bitcoin in an early time, but it didn’t work. Big regret! However, we change our views as time goes on. Nothing is ever easy.

I have an interest in the ICOs and other options. For me, tokens are a great strategy that I will keep for many years.

I like the data about trading speed offered by the different exchanges. Flash Boys, but for the crypto times. When will we learn more about this?

Benedict
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Benedict

Nice detailed write up .

Made with for the Decentralized World.

Cryptomargintrading.info is an independent blog about cryptocurrency margin trading . Our Interest Level does not constitute financial or investment advice.

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