Margin Trading: Vocabulary & Examples - Full Guide [2020 ...
A 6,150% Surge in OTC Trading Sparks Liquidation of ...
Beginner’s Guide on Bitcoin and Crypto Margin Trading in ...
Intro to Margin Trading – Bitfinex Help Center
Margin trading and liquidation price
Simple question : assuming I got a long position of 100 Coins at a value of 10 USD. That mean a position worth 1000 USD. As long as I have at least 150 USDT in my margin wallet (15% of 1000), I can never get liquidated, right? Even if the Coin price nears 0 USD and whatever that "liquidation price" indicates, right? (it would seem its computed assuming your whole equity being in the Coin you have a position of) I want to protect myself against flash crashes.
Hello, I'm new to trading and I have a few questions about margin trading. I hope someone with more knowledge around this could share something. I use bitfinex. I understand that there's a liquidation price for every position you make, which basically what they impose so that you could still be able to pay your borrowed money had the market go against your position. Does liquidation mean that you will lose a percentage of all your assets across all wallets - exchange and margin for example. Or just that one you put on your margin wallet? Another question is, does the stop order prevent you from being liquidated? As long as you put it before you hit the liquidation price? For example, going long at price $100, you have your liquidation price at $50. Placing a stop order at $55 would get you some loss but not liquidate and touch all your assets. Finally, any tips for a beginner trader would be appreciated :)
@binance: [email protected]’s Latest Report Found Greater Capital Efficiency Owing to Margin Trading The latest Global Markets report from #Binance Research focuses on recent #crypto trends, Binance Futures and the impact margin trading has had on liquidity. https://t.co/JF5sRygxpL
@BinanceResearch: [email protected] Research’s latest Global Markets report focuses on #crypto trends over the past month, including the market’s notable swoon, the growth of #BinanceFutures and analysis on the impact of margin trading with regards to crypto-assets liquidity. https://t.co/u3vryov7Hw
Reminder: Kraken is performing a system upgrade in two hours at 21:00 UTC. All spot exchange services including trading, funding and account access will be temporarily disabled for 3 - 8 hours. Margin positions won’t be closed or liquidated. More details in link.
Reminder: Kraken is performing a system upgrade today at 21:00 UTC. All spot exchange services including trading, funding and account access will be temporarily disabled for 3 - 8 hours. Margin positions won’t be closed or liquidated. More details in link.
Reminder: We are performing a system upgrade in 30-minutes at 21:00 UTC. All spot exchange services including trading, funding and account access will be temporarily disabled for 3 - 8 hours. Margin positions won’t be closed or liquidated. More details in link.
Feeling down about crypto losses? Check out this twitter bot that shows every liquidated margin trade on BitMex, many of which are in the millions, and 100x leverage. Hope that made your day a little better!
A cautionary tale about margin trading on KRAPEN - tried for nearly an hour to close my position which held 40 eth yesterday and be up about 15% gains, instead I get liquidated and lose over 3/4 of my portfolio 😱😤
A Beginners Guide to Margin Trading on Bitfinex: Why you Shouldn't be Trading on Exchanges
So I've been talking a lot about Bitfinex recently, since I started using it about 2 weeks ago. Up until now, I've been using a variety of exchanges including Bitstamp and BTC-E to trade my Bitcoin. I just want to point out that there is a big distinction between exchanges, and trading platforms like Bitfinex. On exchanges, all I could do was sell Bitcoin at a high, and buy them back at a low, or hold some USD in the hopes of snatching up some cheap Bitcoin. In fact, I'm sure all of you reading this have been trying to do exactly that for the last few months. If you haven't heard of Margin trading, get ready to be blown away; you'll be kicking yourself for not doing so earlier. When I first started trading on Bitfinex, I was totally tripping out about how I didn't find out about this platform and trade on it earlier. Trust me, when you start using Bitfinex to Margin Trade, you'll be wondering wtf you've been doing on those exchanges for the last few months. Because that's exactly how I felt, and that's also why I'm so excited to share it with you. Since then, quite a few people have been asking me on Twitter to cover some Margin Trading and Bitfinex trading material. So here goes nothing. DISCLAIMER: As much as I like Bitfinex and recommend them for Trading, I do not endorse the site in any way. I do not know if they'll close down today, tomorrow, or a year from now. I also do not know how they handle their funds internally and whether that will pose a problem in the near future. Please trade with caution, and only use money you can afford to lose. If you hear anything negative (e.g. withdrawl issues etc.) about Bitfinex on Reddit/Bitcointalk/Twitter, please make sure to let me know too!
You must be wondering, first of all, what exactly is Margin Trading (http://www.investopedia.com/university/margin/margin1.asp)? In a nutshell, margin trading is basically borrowing money from the broker (trading site) for trading. Bitfinex currently offers a leverage of 1:1 up to 2.5:1, meaning that you can borrow 1 up to 2.5 Bitcoin for every 1 Bitcoin deposited. For beginner traders, I suggest changing your leverage right after you set up you account to 1:1. Keep in mind that by borrowing funds, you'll be subjected to interest charges (10-13%) which is automatically factored in when you close your position. If you're inexperienced, please listen to my advice, or you could get burnt badly (although 2.5 leverage is pretty decent). For example, if you use 2.5:1 leverage, and short sell your whole account from $800, but price goes up by $800/2.5=$320 to $1120, you're going to lose ALL your Bitcoin in your account (even lower than that actually, because of a platform's stop-out level and margin call). Of course, this can be easily managed with a good trade size & risk management strategy, which I will cover later. There are 3 options to choose from on Bitfinex; Exchange, Margin Trade, and Liquidity Swaps. If you head to their 'how it works' page (https://www.bitfinex.com/pages/howitworks), you'll be able to find a good explaination of each of the 3 different functions available. More importantly, I will only focus on Margin Trading, because that's all you'll need to get started on Bitcoin/Litecoin trading. Let me just orientate you the site before we go on further. Once you create your Bitfinex account, you'll arrive at this page as you see below. So first of all, click on Margin Trade, and select the currency pair that you would like to trade. Secondly, you can see your active positions held, for example I have a sell order (indicated by the '-' sign) at a price of $845, and I'm making ~5% on my trade at the time of posting. You can also see a 'close' action available, which allows you to close your position at the current market price. Thirdly, you can see some of my active orders; red is sell, and green is buy. I have already set 5 different buy positions on $BTCUSD at $701, $688, $622, $555, $471, and 3 sells at $850, $899, and $988. You can see already, that there's much more room to play around with trading on Bitfinex as compared to a traditional exchange. And lastly, the 4th section is where you place your orders. There's 5 different kinds of order types, namely Limit, Market, Stop, Trailing Stop, and Fill or Kill. So what we'll focus on here is how to actually place orders, and how to manage your orders on Bitfinex. For more about technical analysis and an introduction to trading strategies, visit my previous blog post here (http://alunacrypto.blogspot.nl/2014/01/embarking-on-my-bitcoin-trading-journey.html). If you're thinking of starting out on trading, I highly advice reading the linked article, as well as this set of very good resources by Reddit user ClydeMachine (http://www.reddit.com/BitcoinMarkets/comments/1uedc5/technical_analysis_weekly_review_1_technical/). Let's say we deposit 10 Bitcoins into Bitfinex for trading, and we think that the general trend is going down, and want to place a short sell to capitalize on the fall. You'll place a Limit Order, enter your price say $850, for a total of 1 Bitcoin, and click the Margin Sell button. Let's also say from Technical Analysis you figure out that the next support levels are at $760, and $700. So at the same time...
Read more, including some important tips for beginner traders, as well as an FAQ regarding Techincal Analysis and Trading, Bitcoin prices going down, and the future of Bitcoin. Full article at: http://alunacrypto.blogspot.nl/2014/01/beginners-guide-margin-trading-bitfinex-exchange.html If you found this post helpful, feel free pay for my next cup of Coffee in Bitcoin. Cheers & Good luck trading! =) 14J7iq1cmG6BAPgHdwrUzumZYV7ro449iG Have questions? Comment below, or PM me / Tweet me @onemanatatime whichever your prefer!
The state of eDollar: introducing the Dai, a cryptobond backing the eDollars stability
Introducing the Dai - 贷
The goal of eDollar was to create the ultimate cryptocurrency, with unbreakable stability, autonomously enforced liquidity, and high utility through a focus on ease of use, service integration and accessibility. It turns out that the best way to develop something this complex is to create each part of the value proposition in stages. For that reason we decided to first focus on the on-chain mechanics of the system, and hold the eDollar brand back until the release of a fully featured UX-optimized app, as well as keeping the name proprietary so we can use it as an asset to present to VC's when raising money for launching eDollar Inc, a real world company that will deliver a service similar to coinbase, but for eDollar (as well as developing the open source wallet app). The on-chain token will instead be called the dai, trading symbol DAI and currency symbol 贷. While eDollar is meant to be a cryptocurrency that is optimized for user experience, dai will not be focusing on user experience at all and will instead be meant as a cryptobond where Maker passes on 90% of the yield - interest paid out from dai issuers (similar to bond issuers) to dai holders (similar to bond holders). The dai is ultimately meant as a contract-level instrument for integration with other dapps and user interfaces as a stablecoin or steady income investment, something our asset management API makes it easy to do. Dapp developers can create their own branded stablecoins or cash coins for their dapps and have them "backed by dai", earning income by taking a portion of the yield This change was already announced on the Maker forum (for the 10 or so users we have :P), and I thought it was time to announce it to the wider ethereum community so you won't be confused that eDollar isn't coming out at frontier launch like it was promised and another stablecoin/cryptobond called dai exists instead.
The peg mechanics are as solid as ever
The peg mechanics will be the same core mechanics that governed eDollar, since dai is just a rename. The dai is fully collateralized by 200% of any type of good collateral on the ethereum blockchain (ether, bitcoin, makercoin, DGX gold, augur rep and others), as well as insured by Maker's income, and its power to inflate makercoin in a black swan scenario. In addition to its use as a dapp-integrated stablecoin and cryptobond, the dai will be directly marketed primarily as an instrument for larger lenders and borrowers (who receive 24/7 live support by me and other members of Nexus), or tech savvy margin traders who are able to navigate a fully featured but rough UI, and finally in the future it will focus on DAO debt financing, and even financing for real world companies and start ups. The goal is that soon after Frontier launch, dai holders can earn a yield of 6.3% APR (while keeping their funds safe from volatility in a USD pegged asset), and dai issuers can borrow money at 7% APR (used for margin trading and liquidity reasons). This puts the dai yield above real world bonds, but the interest rate for borrowers such as bitcoin margin traders is way below the up to 30% APR you have to pay for bitcoin leveraging on bitfinex. As the interest rate is variable, it will be for the market forces to decide where the rate ends up in the medium term, but overall dai is guaranteed to provide a strong credit system for ether traders and traders of other tokens in the ethereum ecosystem to use or integrate in their contracts and dapps.
Using dai in your dapp to provide stability and monetize your float
Dai will also be freely available for integration as a backing token by any dapp that needs a stable store of value for its users, so they dont have to worry about volatility of the funds they hold on your platform. If you're a dapp dev that is interested in using the dai as a cash token in your dapp, let me know here or on our forum. We will provide free integration support and guidance on monetization if you're interested. We are soon revealing the first peek at dappsys, the contract system architecture designed to handle the complexity of the Maker system. All Maker assets (including utility wrappers for using ETH as a smart asset) will implement the four main asset patterns, and new interfaces can be added after going through the governance process. We plan to become the dominant asset management contract system by treating contract API consumers as first-class users. We will release an ebook on advanced integration patterns with Maker. Much of the content is available now for developers who want to begin integrating dai. To read more information about the new names and terms we use, as well as the mechanics of the dai you can check some of the recent posts on the Maker forum:
You can also visit our OTC forum Maker OTC if you wish to buy and sell ether for bitcoin or dai after frontier launch.
This post is the first in a series of daily announcements related to Maker, leading up to the Monday reveal of dappsys - the contract architecture behind Maker. I'm so excited that it looks like we're finally going to see the ethereum blockchain go live. It's been a crazy ride so far and it's probably only going to get more and more interesting as the first dapps start becoming operational. Best of luck to everyone, and thank you to Vitalik and the developers for inventing it.
Seeing AMD is ATH on Monday, I became greedy yesterday and sold 200 naked calls expiring 814 at $85/$90 hoping the stock will pull back. Tuesday, AMD surged as a huge surprise, which instantly destroyed my buying power. Fidelity called and I had to liquidate for margin call. So $50k loss in 24 hours. The lesson learned here
Never sell naked calls (although, in this case, it won't help very much as $90 and $95 calls are much cheaper)
Never use too much of your buying power to sell calls, you will likely get margin called if price move against you.
A black swan event or a sudden price change in a stock could bankrupt you. I felt in a way lucky that AMD didn't got to $90 today and remained at $85.
Don't blind yourself P/E ratio, technical analysis on a trendy and passion stock. These don't seem to matter for growth stock anymore.
Be determined when cutting your loss, this morning, I could have limited my loss to $35k when it dipped to $83, but got greedy again and waited a few more minutes and price bounced back to $85.
I'm very unpleased by this outcome, as it's the biggest lost I've had in my trading career, which also wiped out all my gains over the last two months, I hope this would be a good cautionary tale for others. Edit: I honestly didn't expect this many comments, so just a few reactions to "what I could have done replies":
Rolling the call - I thought about rolling the call to a higher price at later exp date. The upside of this is I won't lose more money than I already lost, but trading off time and security - and the reasonable moves to roll would be in 8/28 or 9/7 but at that time, who knows if AMD will rise to $95-$100 again giving its upcoming PR and new product releases?
Buy the cover when short is ITM - I thought about buying 200 contracts to cover my position, that will restore some of my buying power to avoid liquidation, but these contracts are really expensive now we're talking about $1.9 at $90 to cover $3 at $85, they won't necessarily limit my loss exposure significantly (the reason I didn't buy the cover in the first place), the best case scenario at 8/14 I might only lose $20k, but AMD can keep going up into next week as market index is going up.
Why I believe AMD will keep going up - even AMD by itself at this point is standing still and moving sideway, the macro is going up and things are getting better than I thought, with Friday's bill potentially passing, market can celebrate another 1-2% tech gain and I would be losing another $20-$30k. I also think the chance for AMD to pull back could happen not this week, but next week or late August - based on prior history, in 2018, 2019 AMD both had two long run up streak of %20-%30 gain for more than 2 weeks before pulling back.
Margin Liquidation Level This is the margin level at which the automated liquidation process will occur. This level can vary depending on volatility, but a rough estimate is about 40%, however it is still possible to be liquidated at a margin level of 80%, at Kraken's discretion. Assets liquidation – Brokers in margin trading have the power to initiate actions against the trader if they breach the trade agreement. The brokers have the right to liquidate your assets and recover their funds if you fail to honour a margin call. Margin Trading Best Practices Margin trading is a powerful tool for accelerating portfolio growth. Margin trading is best suited for short-term scalpers and daytraders. Due to the daily interest rate and the possibility of volatility-induced liquidation, margin-positions should not be held long-term. Liquidation. The liquidation level, also called the margin maintenance on Bitfinex, is of 15%. For a position of $3333.3 with a collateral of $1000, liquidation happens when you have a loss of $1000 - $500 = $500 on your position. Thus, when your position reach $2833.3: Your required equity is of $500: But 225 is a quite accurate indication. Liquidation price is affected by multiple moving variables, and may change quickly. The price indicated on the trading page is indicative and not a contractual price. Funding for margin positions . When you are margin trading you will be borrowing funds and interest rates may be charged.
Key points : - Unlike traditional markets, when you trade on Kraken Futures, your losses cannot exceed your deposits. - Initial margin is the margin required to enter a position. The larger the ... Liquid is a unified, globally-sourced trading platform that bridges the worlds of fiat and crypto. Liquid puts the power in your hands. Grow and manage your portfolio from a single dashboard. This video is unavailable. Watch Queue Queue. Watch Queue Queue One trading jargon that you’ll hear very often is margin. It’s usually in terms like margin account, margin trading and even margin call. It seems a bit comp... 📌Binance SHORT TRADE Tutorial Binance Margin Trading FULL Tutorial Margin Trading Beginners - Duration: 20:03. Mango Research 2,581 views. 20:03. $1,000 to Six Figures ...