Cryptocurrency exchanges with margin trading
Margin trading is a form of trading when a trader can trade with more funds than he/she has on his/her balance, at the expense of credit funds, i.e. the credit leverage, which can be of different sizes. Margin cryptocurrency trading is possible and this is a fairly popular type of trading. Let’s consider, which cryptocurrency exchanges offer to trade with a credit leverage.
Benefits and drawbacks
Margin trading is a risky type of trading, especially if cryptocurrencyis traded. Crypto trading beginners are not recommended to deal with it. Although experienced traders also regularly suffer losses in margin transactions. That is why if a trader decided to try trading with a credit leverage, then you should start with small amounts. On the other hand, in case of a win, a margin transaction brings a much greater profit as compared with conventional trading. This is even more true for the cryptocurrency market, which is characterized by high volatility. But in case of improper actions, the losses will also be great.
Among the advantages of margin trading, it is also worth noting a low entry threshold for traders who want to try operating with large funds, but do not have them. Margin trading will help diversify the investment portfolio when the trader is currently looking for more profitable cryptocurrencies. One can also note that margin trading is very stressful, which can be one of its disadvantages; one wrong decision and all positions can be lost, and the trader will be indebted.
Top margin cryptocurrency exchanges
Huobi (go to the exchange website) (fig. 1) is an international cryptocurrency exchange with headquarters in Singapore; it is one of ten largest in the world, focusing mainly on the Asian region and European countries. The crypto exchange features a multi-functional trading platform where you can trade more than 100 cryptocurrencies, Huobi has its own HT token.
Margin trading at the exchange is available for several cryptocurrencies. The maximum account leverage for bitcoin is x5. There is a special section for margin trading. You need to verify your account for margin trading, this can take up to two days. Registration is done via email or by phone. You should fill in the registration form, which indicates citizenship, contact details and so on.
Verification on a crypto platform enables you to increase protection and withdraw funds in large amounts. Identification data and its scan or photo are required during verification. Huobi has a compensation fund, the money from which can be paid in case of a hacked exchange, theft or irretrievable loss of cryptocurrency. Almost all the funds of crypto-exchange users are kept on cold multi-signature wallets. Login security is provided by SMS authorization, email binding to account and Google Authenticator activation.
To start margin trading, you need to send money to the balance for regular trading, and then click on the «Margin» section and select a pair to trade, for instance BTC/USDT. In the window that appears, you need to enter the desired loan amount, confirm it and wait for the loan approval. Then you can start the trading process by clicking the «Margin» button. When the trading operation is completed, you need to quickly pay the debt to the exchange; to do it you should find the appropriate service in the «Margin» section, scroll down and click the «Pay debt» button.
Cryptocurrency exchange Binance (go to the exchange website) (fig. 2) is one of the leaders in terms of cryptocurrency trading volume, a frequent winner of surveys of crypto enthusiasts on usability, size of commissions, reliability and so on. It has two options – Basic for beginner traders and Advanced – with advanced functionality for experienced traders. More than 450 trading pairs are available at the exchange; the largest trading volumes are made by cryptocurrencies BTC, ETH, TRON, NEO. Some coins can be withdrawn only in whole amounts. Internal token of the BNB exchange is popular; you can reduce fees using it.
You need to fill in the form, enter the email address and password, accept the conditions and enter the authentification code in order to register. Then the email is verified using the Verify email link in the email from the exchange. The exchange recommends and insists on two-factor verification; for this purpose you should connect authorization from Google and download the Google Authenticator application. But the ability to add a phone is not available in all regions. Initial user status is Lv 1, which enables you to withdraw up to two bitcoins per day. If you need to increase the level to Lv 2 and withdraw the amounts up to 100 bitcoins per day, you should pass a verification, which is possible only with 2FA authentication connected. Scans of documents should be loaded and checked by the exchange for verification.
Binance launched margin trading only this year. The exchange warns that margin trading can take place after two-factor authentication and identity verification. If the user data is not included in the black lists, he/she can start creating an account for margin trading. For margin trading, you need to open an account in the account management panel by clicking on the «Margin» button, then «Open Margin Account». When the margin account is activated, you can start transferring funds from your wallet: in the «Wallet» tab, you should select «Margin», click «Transfer», select a coin and confirm the transfer. The funds on the balance determine the account leverage at a fixed rate of x3.
The exchange also shows the level of risk taking into account the amount on the balance and total debt, and shows how much additional funds need to be paid in or reduce them. The exchange warns that the trader’s assets will be sold at a margin level of 1.1 and he/she should pay off the debt. The exchange repeatedly draws attention to the high risks of margin trading; before opening an account, it is proposed to study the principles of margin trading, as well as study and agree to the terms of trading.
Bitcoin Mercantile Exchange (go to the exchange website) is another leader in the crypto trading industry, it is initially more suitable for experienced crypto traders, while it is easy to register, it is characterized by anonymity and security. You should only have an e-mail to register on the BitMEX exchange; after registration, the first time you enter the exchange, it is recommended to go to «Account and Security» and connect to two-factor authentication through Google Authenticator or Authy applications.
The peculiarity of this exchange is that you can trade with different cryptocurrencies, but replenishment and withdrawal are made only in bitcoins. Another feature is the insurance fund with a size of more than 30 thousand bitcoins; its advantage is that if the trader went negative, then payments are not required from them, the creditor will make a profit even if the trader’s losses do not cover his/her expenses. An account at the exchange is replenished through the «Deposit» section to which coins are credited; one confirmation in the network is enough for this purpose. Funds can be replenished at any time and withdrawn only 1 time at 13.00 UTC, but without exchange commission.
Margin trading is considered a strength of BitMEX. Traders are offered two types of margin trading – Cross margin and isolated trading. The Cross is set by default; according to its conditions, the entire balance is distributed between positions of the trader and the leverage is determined by the commission size. Isolated trading enables you to set leverage size, which allows you to allocate part of the balance to trade. The exchange offers different leverage sizes for different cryptocurrencies:
- Bitcoin – x 100.
- Bitcoin Cash, Cardano, Ripple, EOS, Tron – x20.
- Ethereum – x50.
- Litecoin – x 33.33.
Margin trading conditions provided by BitMEX are very risky (fig. 3), especially taking into account the volatility and price of bitcoin. In the history of the exchange there have repeatedly been facts of liquidation of positions in the millions of dollars. Therefore, even experienced players are encouraged to first try trading in test mode.
Poloniex crypto exchange (go to the exchange website) is a giant of crypto movement and the largest trading platform; it currently accounts for up to 20% of the global bitcoin turnover and the exchange is generally characterized by a huge trade turnover equivalent to USD 1 billion per day. A large turnover means that almost any application will be executed, and this also enables you to keep small commissions for transactions and the trader has the opportunity to reduce them. The exchange offers many pairs of cryptocurrencies, but does not operate with fiat, it provides a large number of tools for trading, for analysis, statistics, strategy development, and forecasting. Most Poloniex user funds are stored in cold wallets.
Registration in Poloniex is done via e-mail, but a simple registration doesn’t allow you to do anything, it only gives you access to the platform, you can’t trade, you can’t withdraw funds, as well. And moreover, if there is a long pause between registration of an account and verification, the exchange may block the account. Therefore, for trading, it is advisable to immediately pass the verification process, the KYC process, which takes several hours, document scans, selfie with an identity and other data will be checked by the exchange specialists manually and can officially take up to 24 hours, and much longer according to feedbacks. As with all modern exchanges with a high reputation, it is recommended to immediately protect funds with two-factor authentication immediately after registration, this is important for Poloniex, as the exchange has been hacked for several times.
Margin trading (fig. 4) is one of the main areas of trading on the Poloniex crypto exchange, the corresponding section is located right in the «header» of the interface. To start margin trading, funds are transferred from the Poloniex Exchange account to Poloniex Margin account. Lenders offer funds for margin trading through the Poloniex Lending function. Poloniex offers leverage up to x2.5 for BTC in a pair to which it Ethereum, Stellar, Monero, Ripple, Litecoin, Dash, Dogecoin, Maidsafecoin, Factom, Clams, ATOM, STR, EOS, ETC, Bitcoin Cash ABC are offered.
The initial margin is 40%, which means that a trader who wants to trade seriously must have significant funds on his/her balance. In an account for margin trading, items such as Total Borrowed Value – full amount of the loan, Total Margin Value is the balance of the margin account, Unrealized P/l is the estimated loss/profit, Unrealized Lending Fees is the interest on the use of borrowed funds, Net Value is the amount of funds minus commissions and profit or loss, Current Margin is the current margin, if this indicator is lower than Maintenance, service margin, which is 20%, then the position is liquidated. To open a position, a trader should indicate the amount, volume and maximum rate for using a loan for a trading day. The rate is set by the trader and agreed by the lender.
Kraken (go to the exchange website) is the oldest cryptocurrency exchange, founded in the USA at the dawn of the cryptocurrency era. The following cryptocurrencies are available for trading at the cryptocurrency exchange: Bitcoin, Ethereum, Bitcoin Cash, XRP, Tether, Stellar, Litecoin, Monero, Cardano, Ethereum Classic, Dash, Tezos, Augur, Qtum, EOS, Zcash, Melon, Dogecoin, Gnosis, as well as Canadian dollars CAD, pound GBP, US dollar, Japanese yen JPY, EUR. By the way, euro occupies a leading position in the crypto world turnover. The exchange presents several levels of verification. At the zero level, the user can learn the platform but cannot trade. At the first level one can only trade cryptocurrencies. Starting from the second level, a fiat trade is available to the trader and limits are increasing.
Registration takes place via email, to which a letter with a personal code and activation key are sent. You need to copy it, return to the account registration page and enter the Activation Key in a special window. After activating the account, the user will get access to the personal account with the settings. You should verify your account to trade, gradually providing the following information:
- Contacts, citizenship, place of residence, personal data and the opportunity to replenish the account unlimitedly and withdraw daily up to USD 2,500 and monthly up to USD 20,000.
- Provide information on the place of registration, registration, having the opportunity to trade with cryptocurrencies equivalent to USD 5,000, monthly up to USD 50,000 and fiat equivalent to USD 2,000 per day and up to USD 10,000 per month.
- Verify identity card and registration. From this point forward, alongside with the next increase in the limits on crypto and fiat, the margin trading will become possible.
- Verification for large players and corporations, according to the results of which an individual agreement with the exchange shall be concluded. At this stage we are talking about amounts of hundreds of thousands and millions of dollars.
Margin trading is open at the cryptocurrency exchange at the end of the last year (Fig. 5). Thus, at the third level of verification, a trader can trade with a leverage x5 for bitcoin, ethereum and ripple and x2 for others. To do this, you should go to the Intermediate interface on the Trades page, where there are additional functions, including margin trading for 12 cryptocurrencies.
Kraken charges a margin trading fee. For example, the commission for opening a transaction for bitcoin is 0.01%, for ETH (Ethereum) is 0.02% and so on, a commission is also charged for transferring a transaction. Funds can be withdrawn from the exchange with cryptocurrencies or via bank transfer, but only upon completion of the verification. There are commissions for replenishing fiat. Kraken generally differs from all others in its conservatism and utilitarianism on the verge of limitation, but it is one of the leaders in terms of reliability and safety.
The Singapore Bitmax exchange (go to the exchange website) is one of the youngest crypto exchanges, it is considered to be advanced and progressive mainly due to its trading mining capabilities, Trade-to-Mine, in which the more transactions the user performs, the more his/her income, in this case, by BTMX tokens. Exchange restrictions are related to the fact that it is presented in Chinese, Korean and English, perhaps they simply did not manage to translate it. There are also no fiat transactions on the exchange.
Registration is made via email, but a simple registration does not enable to withdraw funds. Google Authenticator is required for withdrawal. The six-digit code that will be generated shall be used for transactions at the exchange. Verification implies passport data, selfie with passport, email address and BitMax.io address
BitMAX offers margin trading (fig. 6) with leverage up to x10 and a commission of 0.04%. Participation in margin trading will require a loan collateral on the account at least up to x3. A special Margin Account shall be opened for trading, to which the user will transfer funds from the «My Assets» section. As soon as the trader transfers the cryptocurrency to Margin Account, his/her balance is considered to be collateral for the loan; it will be made automatically. Direct trading is carried out in the Margin section, located in the exchange interface. Users recommend transferring funds in BTMX tokens, this is more profitable. There are trading pairs with this token, as well.
Another fairly well-known Gate cryptocurrency exchange Gate.io (go to the exchange website) (the Bter Chinese exchange purchased by the Americans) presents the opportunity to trade about 300 pairs of currencies, there is no support for fiat. Features such as multilingualism are noted, however, translation into 12 languages is not very correct, except for English. High security level and fairly responsive support, although not everyone agrees with it.
Registration is made via email or by mobile phone. When registering, you should generate two passwords – for entry and a trading one; they must differ. The exchange can be tied to IP, but it is not necessary if the IP is dynamic. Upon registration, the exchange shows which websites similar to it are phishing and offers the opportunity to generate an anti-phishing code. You should pass an additional verification with confirmation of personal data for transactions with large amounts, as well as to speed up replenishment and withdrawal and increase the security level. It is alleged that verification is carried out within 24 hours.
The exchange provides the possibility of margin trading on pledge (and liability, Fig. 7) of users with a leverage of up to x3. The user can provide an interest credit to the user or take a certain amount for trading for a certain time. Trading takes place in the «Margin» section, the size of the loan depends on the amount transferred for trading. The default is issued for ten days in default, but the term can be extended. Margin trading at the exchange can start with USD 100. If a trader delays in payment of a loan, his/her assets are blocked.
OKEx cryptocurrency (go to the exchange website) is a regular member of the top 10 crypto exchanges. It offers to trade more than 400 trading pairs, but fiat is only for yuan. Registration is effected by email, using the confirmation code or by phone; you should enter the phone number and code from SMS in the activation window in this case.
Exchange verification is mandatory for all users. At the first level you should indicate citizenship, an identity card is provided. At the second level the full data about the trader is downloaded – registration, scans, selfies. The third step involves checking by the online support service. Trading can be started after level 1 verification. It is alleged that verification to level 2 takes 72 hours, but traders deny this. The exchange has a limit on the withdrawal of funds, which increases with increasing trading volumes, but does not exceed 1 thousand bitcoins.
Margin trading is possible after complete verification. It is proposed to trade at OKEx with the maximum leverage of x5. The margin trading service is located in the «Spot Market» section (Fig. 8). You should replenish the account to take part in the auction; the maximum loan amount from the exchange is USD 500 thousand.
Another new but fast-paced Bybit exchange (go to the exchange website). It is well known to users as the exchange, which provides bonuses for registration and for the first deposit (in the latter case, you should deposit a certain amount into the account). Transactions are made in cryptocurrency. Registration is standard, however, the code that will be sent to your phone or email will be active only for 5 (five) minutes, so you need to hurry. New members can practice on a demo account. Withdrawing funds from the exchange is associated with account protection; you should activate two types of protection offered by the exchange so that you can withdraw money.
Bybit provides margin trading opportunities (fig. 9) for BTC/USD or ETH/USD with a leverage of x100 and EOS/USD or XRP/USD with a leverage of x25, with restrictions on the amount of funds to open a position. A feature of the exchange is that the leverage size can be changed after opening a position. The exchange sets a risk limit and eliminates unprofitable positions less often than other crypto exchanges according to user reviews. When a position is liquidated below the ceiling price, the counterparty costs will be reimbursed from the insurance fund of the exchange.
Prime XBT Trading Services (go to the exchange website) (fig. 10) is a specialized cryptocurrency margin exchange. At the exchange you can trade with leverage x100 pairs BTC/USD, ETH/USD, LTC/USD, XRP/USD, EOS/USD and ETH/BTC, EOS/BTC, LTC/BTC, XRP/BTC crosses became recently available. At the same time, you can replenish the deposit with cryptocurrencies and fiat from the built-in Changelly exchanger. The exchange charges 2 types of commissions: per transaction and overnight financing. 0.001 BTC is required to start trading.
PrimeXBT also determines limits beyond which it reduces leverage. The trader cannot adjust the leverage by himself/herself. There are also restrictions on the amount, for example, for Bitcoin it is 15 BTC and you cannot open an order of a larger value. Registration of an account at PrimeXBT is simplified – a password is sent to the e-mail and you should click a link to confirm it. It is recommended to strengthen verification by installing Google Authenticator.
The following crypto exchanges that have good functionality for margin trading should also be noted:
- Currency (go to the exchange website): offers leverage up to x50, leverage size and position volume are indicated by the trader;
- Deribit (go to the exchange website): offers trading with a leverage up to x100, simplified verification, replenishment and withdrawal are made only in BTC;
- Bibox (go to the exchange website): you should have a separate account, leverage x3 for margin trading.
How can you choose an exchange for margin crypto trading?
Not all exchanges where margin trading is available are suitable for high-quality trading. When choosing a cryptocurrency exchange, you should proceed from the following parameters:
- High liquidity of the cryptocurrency exchange.
- Large selection of cryptocurrencies and a sufficient selection of fiat.
- Many active users.
- Operational support service.
- High security, in particular, two-factor authentication is highly desirable.
- A large number of trading, analytical and statistical tools.
- Relatively small commissions.
- A sufficient selection of deposit and withdrawal options.
- Mostly positive user feedbacks, if there are some negative ones.
These features will slightly reduce the risk of margin trading due to the fact that they will reduce the likelihood of technical failures or unpredictable actions on the cryptocurrency exchange.