SPOTLIGHT ON POLONIEX : MARGIN TRADING with POLONIEX

Margin trading is a really interesting trading feature which is supported by POLONIEX. Simple idea is trading with borrowed funds or trading with others funds instead of using your own assets. Okey let's get in to the topic. Margin trading works like this. When you activate a margin order on poloniex , all the assets you are using for that trade is borrowed and they are from the funds of users who offered P2P loans. The assets in your margin trade account are then used to settle these debts for lenders. If you are a newbie for margin trading you need to know some concepts first before starting. So let's take a look at them.

Key terms you need to know

Accounts :

For a margin trader in POLONIEX there are 3 separate accounts you have to use. First one is the Deposit account which can be used to deposit crypto assets and store. The second account is Exchange account which can be used to hold the assets to be used for the regular trading. And the third account is Lending Account which can be used to loan funds to other users and you can earn a profit from the interest.

Positions :

A position is opened when you borrow assets and start a trade. There two types. You open a long position when you buy and a short position when you sell. When trading the positions are changing. And when the trade is completed your loans will be settled if you were able to close the position with a trading profit. The profit will be added to your margin account. And if you loss the amount will be settled from your margin account too.

• Position : long position or short position depending on buying or selling
• Action : You can close the position clicking on this
• Amount : The amount of assets you buying or selling. If you are selling it will be negative.
• Base Price : The value you need to close the position for break even
• Unrealized P/L : The profit or loss you will get when the position is closed.

When looking from the surface you will feel like this is pretty simple and profitable. But this is a very complex trading procedure with a great risk. If you search under following topics with margin trading you will find out all the associated risks.

• Amplified losses : Investors can end losing more than the initial investment
• Margin Call : Requirement to add more money to margin account till margin maintenance level
• Liquidation : When the investor does not meet the margin call , broker will liquidate the assets from margin account depending on the agreement.

POLONIEX is coming forward as better place for margin trading and will be a challenge to the other exchanges very soon. We know currently Bybit , Binance, BitMex and Deribit leading for margin trading and Poloniex in the top 10 but I think it will lead very soon.

#poloniexspotlight #steemcryptochallenge #srilanka #crypto