Margin Trading User Guide | Crypto.com Help Center (2024)

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Margin Trading User Guide | Crypto.com Help Center? ›

While spot trading of crypto using margin is prohibited in the United States for most investors, derivatives offer investors an alternative path for trading with leverage. In this article, we'll cover the basics of trading derivatives with leverage and the benefits and risks associated with it.

While spot trading of crypto using margin is prohibited in the United States for most investors, derivatives offer investors an alternative path for trading with leverage. In this article, we'll cover the basics of trading derivatives with leverage and the benefits and risks associated with it.

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Crypto margin trading, also known as leveraged trading, allows users to use borrowed assets to trade cryptocurrencies. It can potentially amplify returns but also magnify negative returns. Understanding the concepts of margin levels, margin calls, and liquidation is crucial in crypto margin trading.

What happens if you lose a margin trade on crypto? If you go long when you should've gone short, or vice versa, and you don't maintain your margin, your collateral will be liquidated and you'll lose your initial investment.

Non-marginable securities include penny stocks, OTC stocks, and recent IPOs, as the securities tend to be riskier due to higher price volatility and lower liquidity.

User reports indicate no current problems at Crypto.com.

Crypto.com, which was founded in Hong Kong and now operates out of Singapore, is the largest of the exchanges “deemed to be licensed”.

On Crypto.com App's Menu > Settings page, there is a “Refund Currency” setting for you to select your preferred cryptocurrency to receive. When a refund is issued on a payment paid using Crypto.com App, the funds will be credited automatically to the selected cryptocurrency's balance in the App account.

The possibility for leverage to work against the trader is one of the biggest drawbacks of trading crypto on margin. Leverage can potentially boost returns, but it can also potentially increase losses. If a trader is highly leveraged, a small loss can easily turn into a big one.

What is a good profit margin for crypto? ›

Most experienced crypto traders aim for at least 50% profit margin. You can aim for 100% profit margin, or even higher. If, for instance, your investment increases by 100%, it would be alluring to see where it goes. However, be aware that crypto market is volatile and if price climbs to new highs fast.

Buy gradually, not at once: The best way to avoid loss in margin trading is to buy your positions slowly over time and not in one shot. Try buying 30-50% of the positions at first shot and when it rises by 1-3%, add that money to your account and but the next slot of positions.

To enable margin trading, log into your account, and go to Trade > Spot, from the order form, you'll find an Enable Margin toggle. Switching it on will prompt you to accept the Terms and Conditions if that is not already done. *Note margin trading supports limit and market orders only.

Crypto leverage trading is legal in the US, but regulation varies from state to state. The transaction fees associated with crypto margin trading typically involve platform fees, network and transaction costs, and possible liquidation fees.

Fixed fees for margin trading

Depending on the margin pair you're trading, you are charged between 0.01% and 0.02% to open a position. Rollover fees of the same amount occur every 4 hours the position remains open. Before using margin to trade crypto, please take time to fully understand the unique risks involved.

The opportunity to leverage assets

Federal Reserve Board Regulation T allows investors to use margin to borrow up to 50% of the value of a securities purchase.

Margin trading on the Crypto.com Exchange allows you to buy or sell Virtual Assets in excess of what is in the wallet, by incurring negative balances on the Crypto.com Exchange.

Buying on margins of 10 percent cash was made illegal because the practice contributed to the crash of the stock market in October of 1929. In the mid to late 1920's, the economy was booming and the country was benefiting from the success of the industrial revolution.