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Margin Trading Guide for traders
Margin Trading Guide for traders
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Written by Mia Lee
Updated over 2 years ago

We are excited to announce that we have enabled Margin Trading on our platform. Margin Trading provides the opportunity to trade the borrowed assets meaning that our traders now can open Long and Short positions on a variety of cryptocurrencies by up to 12x leverage. Those who use Margin Trading can amplify their potential profit depending on the selected leverage for 110+ markets.

How many pairs can I trade using margin on the exchange?

Traders have access to over 110 pairs at a maximum of 12x leverage

How does margin trading work?

Let us illustrate the idea of Margin Trading with an example. Assume that the price of Bitcoin (BTC) is equal to USDT 24,000 and a trader thinks that it will rise in the future. However, the trader has only USDT 2000 and he or she wants to amplify potential gains. The trader can use the maximum 12x leverage provided by FMFW.io to open a USDT 24,000 long position (trader’s USDT 2000 was multiplied to 12). Now let’s assume that during the next few hours the price of Bitcoin rocketed by 10% to USDT 26400. The trader decides to close this profitable position and realizes a positive PnL of nearly USDT 2400 (you need to take into account the fees and paid Interest Rate, see Trading Fee Page here). If the trader opened this position without the leverage, he or she will get only USDT 200 gain, because the position’s value would be equal to the trader’s balance of USDT 2000.

Who can use Margin Trading?

Margin trading is available to a trader if only they:

  • enabled 2FA

  • have a non-zero trading balance.

How to use Margin Trading?

Adding assets to your Margin Account

Please note that the collateral will be temporarily frozen and it couldn’t be used for trading.

  1. Transfer necessary assets to your Spot account
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  2. Then go to "Margin" on the top menu
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  3. Click the "Margin" button on the top right.
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  4. Then a pop-up window will appear. Enter the amount of collateral that will be reserved on your balance and click "Transfer".
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  5. Now your Buying Power has multiplied by the leverage from 3 to 12. Here presented the example, where the buying power is 120 USDT (110 USDT was borrowed from FMFW.io, with collateral of 10 USDT)
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  6. You can add more margin at any time if needed

Trading on margin

Placing an order during Margin Trading is the same as on the spot markets. Traders can use Market order, Limit orders (Good-Till-Cancelled, Immediate-Or-Cancel, Fill-Or-Kill, Day, Good-Till-Date/Time), and Scaled order. The following links can help you learn more about Market order, Limit orders, and Scaled order. Buying Power is the total amount of assets that can be used to open a position. Please note that your margin position is zero before the first margin order is executed. Traders can cancel an order with zero margins at any time without paying any charges.

How to change the amount of collateral?

Traders can transfer back their funds from margin at any moment. However, you can’t transfer the Required Margin if you have an open position, because it operates as collateral and it maintains your current position open. However, you can retrieve part of the margin.

  1. To retrieve the margin, click “Margin”

  2. Enter the desired amount and click “Transfer”. Your funds will be instantly transferred to your Trading Account.

Disclaimer

Dear traders, please consider that Margin Trading has several risks due to cryptocurrency price volatility and product complexity. We advise you to exercise carefulness and attention. FMFW.io provides high liquidity, 24/7 multilingual support, and dozens of trading pairs complemented by high security, but we are not responsible for the result of your trading activity.

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