MXC will launch the beta version of margin trading at 14:00 (UTC+8), November 7.
Margin trading is a derivative feature from spot trading, where leverage is introduced for users to make greater profits, and on the other hand, users also bear larger risks. Through the margin feature, users are able to increase their asset for trading. Margin trading is subject to greater risks, so please make your investment carefully.
1. Trading fee rate
The trading fee rate is the same as that of the spot trading. Both Maker and Taker are 0.2%
2. How to calculate risk rate？
Total asset (principal + borrowed amount) / (borrowed amount + unpaid interest) *100%
3. Leverage model
It now only supports whole-position model, which is also called crossover insurance deposit model. It refers that all positions share the insurance deposit. When the risk rate falls to 110%, the system will execute asset liquidation.
4. Maximum borrowing amount
Max. borrowing amount = MIN (net asset (equivalent of USDT) × (leverage -1) – borrowed asset), balance of underlying crypto, max. borrowing amount of a user). For example, if the token support 3×leverage, the users is able to borrow 2 times of his margin.
5. How to calculate borrowing interest?
Interest = Borrowed asset × daily interest rate × borrowing period (1 hour = 60 min; 1 day = 24 hour; Less than 1 day is calculated as 1 day)
6. Leverage times
MXC now support max. 5×leverage. For example, if a user has 1 USDT, he/she can borrow 4 USDT. After borrowing, there are 5 USDT available for trading.
7. The max. and min. borrowing amount of a single user
Max. borrowing amount
Min. borrowing amount
Margin Trading Introduction
When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions. Essentially, margin trading amplifies trading results so that traders are able to realize larger profits on successful trades. The following is the introduction of MXC margin trading.
1. What is margin trading?
Margin trading is a way to amply trader’s principal, so that traders can trade and gain greater profit, and on the other side, traders who open margin trading also bear greater risks. Due to the volatility of crypto-market, investors must be fully aware of the margin trading risks before join.
2. How to gain profit from long and short position?
Take BTC/USDT as an example. If the 3×leverage is supported and you have a principal of 10000 USDT, then you are able to borrow 20000 USDT. If you look long of BTC price that will surge from 10000 USDT to 20000 USDT, then you are able to use 30000 USDT to buy 3 BTC at the price of 10000 BTC, and sell them at the price of 20000 USDT. The profit is 3BTC*（20000-10000）=30000USDT, three times of the profit than you gain from your principal. If you look short of BTC price, the same law is applicable.
3. How to calculate the borrow interest rate?
The borrowing interest will be counted from the day you borrow the fund. Less than 1 day will be counted as 1 day. The borrowing interest will be deducted at 00:00 (UTC+8) every day. When you repay the loan, the interest of the day will be counted.
4. What is the risk in margin trading?
Margin trading makes it possible for users to use small amount of fund to obtain larger profit. However, if the market goes to the opposite direction from trader’s prediction, traders will also encounter larger losses. Therefore, ordinary users shall avoid high leverage and heavy position trading, to prevent liquidation.
5. How to decrease risk rate?
- Employ proper leverage times and control position rationally
- Stop loss or profit properly
- Add insurance deposit to ensure ratio between total asset and margin amount greater than 110%.
Borrowing Interest Rate
The daily borrowing interest rate for USDT, BTC, ETH, EOS are all 0.03%. Take BTC/USDT trading pair as an example. If you borrow 17000USDT for 3 days with interest rate of 0.03%, you will pay an interest of 15.3 USDT.
1. Liquidation warning
When the risk rate of user’s margin account reaches 120%, the warning will be triggered. MXC will inform the user by SMS and Email.
2. Liquidation execution
When the risk rate of user’s margin account reaches 110%, the liquidation will be executed, and the user will be informed by SMS and Email.
3. Borrowed asset and interest Repayment
When the risk rate of user’s margin account become lower than 110%, the system will limit users from trading and cancel the placed orders. When all borrowed assets and interests are repaid, the liquidation completes. After liquidation, the remain assets are available for transfer.
When wearing occurs, how to calculate the arrears?
Margin account wearing means margin account asset < borrowed asset + Interest. The arrears = Borrowed asset + Interest – margin account asset.
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Enjoying your trade on MXC.
The MXC team
November 7, 2019