Margin Trading Tutorial
Beginners Guide on How to Margin Trade
Margin Trading refers to the practice of using borrowed funds from a broker to trade a digital asset, which forms the collateral for the loan from the broker. Such use of leverage can magnify gains. From this, we can see that the first step of Margin Trading is to loan funds. With loans, you can trade. You can choose to long or short a certain coin. Finally, you need to repay the interest. This tutorial consists of three parts: loan, trade and repay.
Section 1: How can I loan funds?
1. Log into( ) and click on the “Margin” button. You will enter the “Margin Trading” Page.
2. You will see all the available trading pairs for Margin Trading on the left. You can choose to trade any of them as you need.
Reminder: Each trading pair has an independent Margin Account with independent funds. The funds can not be transferred between Margin Accounts. This means that when you use many leverages if one Margin Account is forced to Liquidation or Margin Call, other Accounts will not automatically transfer funds to this Account. Users need to transfer funds to their Accounts by themselves. Later, we will open BTC and ETH Margin Trading. Please pay attention to our announcements.
3. After choosing a certain trading pair, you can transfer funds as Margin to this Margin Account. Here is an example of XRP/USDT pair:
4. Click on the “Transfer” button and enter the page saying “Transfer In Margin / From Exchange Account To Margin Account” as shown below. Please confirm the coin and amount, then click on “Confirm.”
5. Once you successfully transfer Margin to your Margin Account, click on the “Margin Management” button on the right and start Margin Trading.
6. In the “Margin Trading” page, the available amount is based on your Margin amount and leverage time; you can loan as you need. When there are insufficient funds, please decrease the loan amount. When there are sufficient funds, loans can arrive at your account in real time.
7. When the loan is completed, you can view the details such as Loan Date and Rate, etc. in the Loan Position.
Risk Reminder: Each coin has a minimum and maximum loan amount. When the Margin amount does not reach the minimum, the “Maximum” will appear to be 0. In this way, you should transfer enough Margin into Margin Account. “Loaned” refers to the amount that you have successfully loaned from our platform. “Maximum” refers to the amount that you can loan. The maximum limit of loan is subject to what is shown on your page.
Section 2: How Can I Earn Profits By Margin Trading When The Coin Price Rises (How Can I Long A Certain Coin)?
【“Long” means “Buy”】: Seeing a coin in a bullish trend, transfer Margin to your Margin Account and loan funds from our platform. Buy at a low price and sell at a high price. Repay the interest and earn profits. Here is an example of XRP/USDT. When you want to long a coin, loan USDT and use it to buy XRP. You can follow these steps:
1. In the “Margin” Page, enter the buy amount and click on “Buy.”
2. When the price of the coin goes up to your expected price, choose “Limit Order” or “Market Order” to sell. By placing “Limit Order,” you can set the selling price and amount. When the price reaches what you set, your coin will be sold.
3. If your Limit Order is successfully placed, before it is executed, you can cancel it whenever you want. Click on “Cancel” to the right of your order detail in the “Open Orders” Page.
(1) Choose “Market Order,” and your sell price is the optimal market price. Normally, it will be executed in real time.
(2) Buy at low price and sell at high price. Repay the loan and interest. Once your Margin and interest are paid, you are left with your profits.
(3) The principle of Long is to “Buy at a low price and sell at a high price,” then earn the profits. To avoid loss, you should pay attention to the real-time market when you buy or sell. Keep your loss and profit in a reasonable range, and prevent liquidation or debt.
Section 3: How Can I Earn Profits By Margin Trading When The Coin Price Drops (How Can I Short A Certain Coin)?
【“Short” means “Sell”】: Seeing a coin in a bearish trend, transfer Margin to your Margin Account and loan funds from our platform. Sell at a high price and buy at low price. Repay the interest and earn profits. Here is an example of XRP. When you want to short a coin, loan it, then sell it at a high price and buy at low price. You can follow these steps:
1. First, loan a certain amount of XRP in the “Margin” Page.
2. After the loan is completed, short it in the “Margin” page (sell it at a high price). You can choose to place a “Limit Order” or “Market Order.” Enter the amount and click on “Sell.”
3. We assume that after some time, the price of XRP drops to your expected price. Then in the “Margin” page, you can buy a certain amount of XRP at a low price to repay the loan and interest. When you buy it, you can choose to place a “Limit Order” or “Market Order.”
This picture shows an example of “Market Order.” Enter the buy amount and click on “Buy.”
Sell your loaned coin at a high price and buy it at a low price to repay the loan and interest. The bigger the price spread is, the more profits you can earn by shorting the coin.
Leverage enables users to gain higher profits through fewer funds. If you estimate the price trend correctly and you will be able to earn money by shorting or longing a coin. But if you estimate it incorrectly, you will face a larger loss. Ordinary investors should avoid high leverage trading to prevent liquidation or debt.
Section 4: How Can I Repay The Loan And Interest?
1. When you need to repay the loan and interest, click on “Margin Management” button and view the repay list on the page.
2. Click on the “Repay” button on the right and go to the Repay Page. Enter the repay amount and click on “Confirm.” If there is not enough amount for repayment, please transfer funds into Margin Account.
Reminder: Interest is charged according to the percentage of the loan amount. One day/24 hour is considered as a unit. Any time less than 24 hours will be considered as one day. Interest is paid per day. Interest Rate of Margin Trading: Daily Rate of USDT is 0.1%. Daily Rate of BCC, ETH, LTC, ETC, DASH, XRP, EOS, OMG, and ZEC is 0.1%.
Margin Trading Instruction
By leverage, we can increase profits in spot trading. Also, we have a greater risk of loss. iBankEx Margin Trading is a financial derivative of crypto-crypto spot trading. iBankEx users can increase your tradable balances by leverage so that they can gain higher profits from the investment. However, they must take risks as well. I am going to elaborate on iBankEx Margin Trading in the following section.
1. What is Margin Trading?
Margin Trading refers to the practice of using borrowed funds from a broker to trade a financial asset, which forms the collateral for the loan from the broker. Since such use of financial leverage can potentially magnify gains but could also saddle the trader with devastating losses, leverage has the well-deserved reputation of being a double-edged sword.
2. See a cryptocurrency in a bullish trend? How can I double the profits using leverage?
Take BTC/USDT as an example. iBankEX supports three times leverage. When you believe that BTC price will rise from 10,000 USDT to 20,000 USDT, if you want to invest 10,000 USDT (or 0.5 BTC) as the maintenance margin, you can loan 20,000 USDT maximum from iBankEX. Then buy 3 BTC at the price of 10,000 USDT per BTC, and sell them at the price of 20,000 USDT per BTC. You will gain profits of 20,000-10,000 = 30,000 USDT. If you only trade with your funds, you will not be able to gain the profits. Using three times leverage will amplify your profits to 3 times.
3. See a cryptocurrency in a bearish trend? How can I double the profits using leverage?
Take BTC/USDT as an example. iBankEx supports three times leverage. When you believe that BTC price will drop from 20,000 USDT to 10,000 USDT, if you want to invest 10,000 USDT (or 0.5 BTC) as maintenance margin, you can loan 1 BTC from the exchange. Then sell 1 BTC at the price of 20,000 USDT and buy 1 BTC at the price of 10,000 USDT. You will gain profits of 10,000 USDT. If you only trade with your funds, you will not be able to gain the profits.
4. What is the interest rate of Margin Trading?
Daily rate of loaning USDT is 0.1%. Daily rate of loaning BCC, ETH, LTC, ETC, DASH, XRP, EOS, OMG, ZEC is 0.1%. This interest starts from the moment you loan. One day/24 hours is considered as a unit. Any time less than 24 hours will be considered as 24 hours. When you repay the loan, you also need to repay the interest.
5. What is the risk of Margin Trading?
As mentioned earlier, margin trading can amplify gains as well as losses. If the cryptocurrency you bought suddenly has a sharp decline, you will face the risks of larger losses. So ordinary investors should avoid high leverage trading to avoid liquidation or debt.
6. How can I reduce the risk rate of Margin?
(1) Use leverage times reasonably, and control your positions.
(2) Keep the loss and profit in a reasonable range, and close your positions spontaneously
(3) Add margin in time and make sure that the rate of Margin Balance and Wallet Balance is over 110%.
Here are the related functions of Margin Trading:
1. Margin Account
Each Margin Trading pair has a Margin Account. For example, ETH/BTC pair has an ETH/BTC Margin Account (including ETH and BTC subaccounts). iBankEX users can transfer ETH and BTC from an Exchange Account to a Margin Account. An ETH/BTC Margin Account can loan ETH and BTC.
2. Fund Transfer
iBankEx users temporarily can not directly deposit into a Margin Account. But they can use the Transfer function to transfer funds from an Exchange Account to Margin Account. When users have no loans, they can transfer the part of funds whose risk rate is over 200% to Exchange Account. “Margin Account” page is shown below:
“Transfer” page is shown below:
Funds in a Margin Account can be traded in crypto-crypto trading. “Trend” in Margin Trading and that in crypto-crypto Exchange are the same.
iBankEx users can enter Margin Management, choose Margin Account and apply for loans. The amount of currency that users can loan depends on the amount of maintenance margin and leverage times. Maximum Amount of Loan = Estimated Net Value (BTC) x (Times-1) – Loaned Amount. For example, if iBank Exchange supports three times leverage maximum, users can loan up to 2 times amount the maintenance amount.
How is Risk Rate calculated?
The system will monitor the Risk Rate of users’ Margin Account. Risk Rate = (Wallet Balance/Loaned Amount x 100%)
P.S.: “Wallet Balance” means the total equity held in the Margin Account and is estimated in BTC.
4. Loan Repay
When iBankEx users repay loans, they should repay each loan position respectively, and they must repay in the currency they loan. Repay Amount = Loaned Amount+ Interest. You can choose to repay all or part of the loans. If you repay part of the loans, you should repay interest first, then repay the loaned amount.
Interest formula: Interest = Loaned Amount x Rate x Days. One day/24 hours is considered as a unit. Any time less than 24 hours will be considered as one day.
Margin Trading FAQ
1. What is Margin Trading?
Margin Trading refers to the practice of using borrowed funds from our platform to trade a digital asset, which forms the collateral for the loan. For example, if you have 100 USDT, you can loan from our platform to trade, and your gains can be magnified.
2. How can I apply for loans?
You need to transfer funds to your Margin Account. Once funds are transferred, click on “Margin Management” in your Margin Account and apply for loans.
3. What is “Long”?
Take XRP/USDT pair as an example. You can loan more USDT (you can also loan BTC and ETH when they are open). Buy XRP at a low price and sell at high price to gain profits from price spread. Then repay the USDT to our platform.
4. What is “Short”?
Take XRP as an example. You can loan more XRP. Sell XRP at a high price and buy at a low price to gain profits from the price spread. Then repay the XRP to our platform.
5. Under what circumstances will my Account be forced into Liquidation?
When you are trading a certain pair, and the risk rate is less than or equal to 110%, your orders will be forced to execute to repay the loan.
6. How will the system set the Liquidation Price?
The system will set the Liquidation Price whose risk rate is less than or equal to 110% . This price should be the best for you.
7. How is Risk Rate calculated?
Wallet Balance (Margin + Loaned Amount) / Loaned Amount x 100%
8. Why can’t I transfer funds from Margin Account when I have funds?
Withdrawable Balance = Wallet Balance – 2 * Loaned Amount. You can refer to details on the page.
9. How much Interest should I pay for Margin Trading?
Interest is charged according to the percentage of the loan amount. One day/24 hour is considered as a unit. Any time less than 24 hours will be considered as one day. You can refer to details of Interest Rate on the page.
10. How much is the leverage time?
Each trading pair has different leverage times. You can refer to details on the page.
11. How can I check the risk rate on my Account?
Risk rate is shown in the trading section, which is in the bottom of “Margin Account’ page.
12. How can I check my loan history?
Please check in Loan History, which is in the bottom of “Margin Account’ page.
13. How can I repay the loan?
Please repay in Loan Position, which is in the bottom of “Margin Account’ page.