1.What is Margin Trade
Margin trading (or leverage trading) is a method of trading where users deposit an amount of assets to a third party or exchange as the margin (initial capital), in exchange for a loan a few times their original amount, so that they can actualize more profit with smaller capital. Users must be aware, however, that as they leverage the margin, although they may gain more profit, they also bear higher risk of loss. Users are hence advised to fully understand the risks that come with margin trading before they proceed to trading.
DigiFinex currently supports up to 3X leverage trading with 5 currencies - BTC, ETH, LTC, EOS, and XRP.
We would like to remind our users again that margin trading is risky. A 3X leverage is as likely to triple your loss as it is to increase your profits by threefold. Please proceed with caution.
2.Why Margin Trade?
1.Triple your profits: By multiplying your initial margin by threefold, you can possibly triple your profits.
2.Profit even when market is bearish: One way of making profit is to buy low and sell high. Another way is loanand sell crypto from DigiFinex when the price is high, and repurchase the corresponding amount of crypto when the price falls. Without margin trading, you can only profit from a bullish market.
3.What is Margin Account?
Margin accounts are used especially for margin trading. Users are required to transfer their assets from their spot to margin account before they start margin trading.
DigiFinex does not support asset transfer between margin account and OTC account.
4.How to gain profit through Margin Trade?
1.Triple your profits with the price increases
Take BTC/USDT as an example:
You have a initial margin of 10,000USDT, and you predict that the BTC price will rise from 10,000USDT to 20,000USDT. Feeling adventurous, you decided to apply a 3X leverage with DigiFinex, by loaning 20,000USDT.
Hence, you are able to purchase 3BTC (technically at the price of 1), and sell it after the price rose to 20,000USDT.
Thus 60,000USDT - 20,000USDT - 10,000USDT = 30,000USDT.
After returning the loan of 20,000USDT, you will still make a net profit of 30,000USDT!
If you trade without leverage, you will only make 10,000USDT of profit. Leverage expanded your profit by a threefold!
2.Make a profit even if the price decreases
Take BTC/USDT as an example:
1BTC= 20,000USDT
You have an initial margin of 10,000USDT (worth 0.5BTC), and you predict that BTC price will fall to 10,000USDT.
By making a 3X leverage, you can loan 1BTC from DigiFinex, and sell it immediately for 20,000USDT.
You now have 30,000USDT in total. Wait till the BTC price drops to 10,000USDT.
Buy back 1BTC for only 10,000USDT and return it to us.
You still have 20,000USDT, which means a net profit of 10,000USDT!
If you do not do leverage, you won’t be able to make a profit when the market is bearish.
5.Why DigiFinex?
Doing margin trading on DigiFinex will give you a few advantages:
1.Automated loaning & returning
Users need not make loans or return the assets manually. The system will automatically make the loans after the user transferred the assets from spot margin account. Assets will be returned by the system after the position is closed.
2.Supports multiple cryptos as margin
Margin can be in the form of any of the 6 accepted currencies (USDT, BTC, ETH, LTC, EOS, XRP) for margin trading. It can be used as margin for both the current trading pair, as well as for other margin trading pairs.
For example, if you have 100LTC in your margin account. Other than doing margin trading with LTC trading pair, you can also do margin trading with the other 5 supported currencies.
3.Maximum of 8-hour interest-free period
There is a maximum of 8-hour interest-free period of margin trading. If you closed your position during this period, no interest will be charged except for transaction fees.
If you need to hold your positions for over 8 hours, we will collect interest every day at 00:00, 08:00, 16:00 (GMT+8). And interest varies according to whether you are holding long or short positions:
If you are holding long positions, the interest rate will be 0.03% of the borrowed amount totalling 0.09% for a day.
If you are holding short positions, the interest rate will be 0.01% of the borrowed amount totalling 0.03% for a day.
6.What is the risk of Margin trading?
Users must be aware that as they leverage the margin, they may gain more profit if they predict the right direction, but incur a greater loss if they made the wrong prediction. Users are hence advised to fully understand the risks that come with margin trading before they proceed to trading, and rookie traders should avoid margin trading with high leverage.
7.How to reduce the risks of Margin Trade?
1.Leverage wisely.
2.Stop your profit and loss in timeby closing the order or position.
3.Take note of your margin amount, and make sure that the margin rate is always greater than 30% to prevent auto-liquidation.
How to ask for help：
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Tips, beware of false customer service:
1). Do not provide account password, SMS, Google verification code, WeChat and bank card password to anyone including DigiFinex Exchange Customer Service
2). Please look for the official website: Digifinex.vip & DigiFinex.com
3). Don't click on the unofficial link, beware of computer poisoning information leaks.
4). The DigiFinex exchange staff will not ask you to transfer the payment.
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