EXMO margin trading

EXMO – that crypto exchangewhich offers not only spot but also margin trading. It is conducted using borrowed money. Credit money helps to trade larger amounts than the user has. This can improve the results and bring more income from transactions on the site exmo.me.

The peculiarity of such trading is also that it allows creating short positions, making profit on falling prices. To start margin trading, a trader needs:

• Register an account on the cryptocurrency website and go through the verification procedure. Those who have a verified account can log in to the cabinet and go to the page with information about margin trading.
• Deposit money on the spot balance and transfer it to a margin account.
• Place orders and create positions.

The minimum that is available is 1 US dollar. To find out the amount at the time of position creation, you can use the formula: (market value * minimum) / leverage = minimum to open. The amount that is considered the minimum for a currency is specified on the “Fees and Limits” page.

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Therefore, the gain or loss depends on changes in the value of the currency. The user does not formally own the asset being sold or bought. In order to profit from margin trading, one must close a position. Funds are deposited and withdrawn on a spot trading platform that meets modern security standards. For additional security, traders are advised to enable 2-factor authentication.

Leverage

With leverage, you can use loans to trade cryptocurrency on EXMO. Its size indicates how many times more you can spend to open an offer, given the size of your own assets. The maximum leverage for pairs is indicated on the commissions page. The size of the leverage depends on the strategy chosen for trading. Its application can help increase profits, but it does not guarantee that there will be an income. Traders should keep this in mind before starting a margin trade.

• On the EXMO platform, the leverage size is selected from 1 to what is considered to be the maximum available for the currency pair. When selecting it, it is important to take into account such moments:
• The volatility of the digital asset. The higher its level, the smaller the size of the leverage can be. The current volatility and its expected growth are taken into account.
• The size of risk. The greater the percentage of deposits from the sum of the trader’s assets, the smaller should be the size of the leverage.
• Strategy for trading. The longer the investment horizon, the smaller the leverage can be.

Enclosed.

To get access to trading in EXMO cryptocurrency application, you need to install the program through App Store or Google Play. After creating an account, you need to verify it. After logging in, you need to:

• Go to “Trades” and select the “Margin” section.
• Accept the terms of the User Agreement.

To make a deposit, it is necessary to transfer money from the spot account to the margin account. After the deposit, the user will get access to the transaction history. In the “Trading” tab you can follow the market movements, control positions, change active offers and pending orders. There are 3 tabs available in the section:

• Order. Allows you to form orders to sell/buy digital assets. The application has all types of orders, as in the web version of the site: market and limit, stop, stop-limit and trailing-stop. There are management functions below the form. It is possible to close, view details, increase and decrease the deposit.
• Chart – displaying the dynamics of the market. You can select a pair to track information on it. It is possible to set the time frame.
• Transactions – history of operations on the margin account.

Orders

To open a position on EXMO, you need to create an order. Several orders are offered:

• Market – gives the opportunity to buy and sell digital assets instantly at the market price. Its advantage is the immediacy, but the disadvantage is that there is no way to accurately predict the price.
• Limit – the application is issued at a fixed cost.
• Stop – a pending order is created. When the price of the asset reaches the level specified by the trader, the market order will be placed automatically.
• Stop-Limit – the stop and limit price is specified. The order is placed at the limit price when Stop is reached.

You can’t place an order if there is not enough margin on the account. To release it, do the following:

• Cancel active orders.
• Close their positions in full or in part.
• Deposit funds on the balance on the margin area.

Positions

When you execute a sales/purchase order, a new offer opens. There are 2 types:

• Long – a bet is made that the value will increase. The user buys coins at the current price to sell at a higher price later.
• Short – on the fact that the value will go down, selling currency for a larger amount to redeem later at a lower price.

To open a position on EXMO you need to do the following:

• Select a currency pair and one of the order types.
• Select the order type: for sale/purchase.
• Specify the size of the leverage and the amount of the asset.
• Select sale/purchase.

After the execution of the order the position will automatically open, information about what will be displayed on the page with the same name. To close a position you can use the following methods:

• Creating an order for the entire size.
• Use the cross next to the desired offer on the chart or in the “Positions” tab. Closing will be done by creating a market order at the current value.

Partial closure is also available. To do this, you must:

• Place a sales order for less than the amount specified in the offer. Suitable for long positions.
• Form a purchase order for a smaller amount (for short).

If there will be closing in parts, the profit or loss that has not had time to be realized will also be written off. The part of margin that is proportional to the amount of the closing order to the amount in the offer will also be released. Closing is also available using a pending order. Limit order, stop, trailing stop and stop limit orders are suitable. The amount in the position and in the order must be the same for the closing to be complete. The offer will close when the price in the market reaches the price that was specified in the order.

Financial support

Margin is the collateral funds required for leverage. The money is reserved on the balance until the offer is closed. The collateral is “frozen” under the positions that have been opened by the user and the orders placed by him. Its size depends on what the leverage will be. The margin differs from the initial margin after opening. The reason is that realized gains and losses are deducted from there, including opening and collateral fees. The level is represented by the ratio of the trader’s money in an active position to the size of the last position with losses and profits not realized.

Exmo operates on an isolated margin format. Possible losses on one offer are not covered by profits on other offers. Thus, the amount of possible losses is limited by the margin in the offer. Margin can be reserved in the following cases:

• When creating an order to open a short or long position.
• When forming an order for augmentation.

There are such concepts in margin trading as the amount of funding and its rate. The first is the amount that the crypto exchange lends to the trader for a short or long position. It is given for its entire size. Margin, on the other hand, is used as collateral. Rate – the percentage of the loaned funds. It is charged simultaneously at position opening and growth and once a day for all active offers.

Margin Call and Liquidation

When the price of a margin call is reached, the user receives a margin deposit request. This happens when the price of the asset changes not in the trader’s direction. Margin Call is a signal to the EXMO user that the margin collateral level has descended to a critical value. To reduce the risk of liquidation, it is necessary to replenish the margin funding.

Liquidation – auto-closing of a position, which is necessary if the user has made a mistake with the forecast. In such a situation, funds may not be enough to cover losses. In order to avoid more losses, the exchange liquidates the offer. When the value of the asset reaches the liquidation price, the position is closed. This indicator is displayed in the table. The final value may not be the same as indicated at the beginning. The reason is that a market order is formed during liquidation, and if there is a large slippage, the value may change.

• Reducing the risks of liquidation is available in several ways:
• Adding margin to reduce leverage.
• Self-closing sentence.
• Placing an order with a stop price that is higher or lower than the liquidation value for a long and short position, respectively.

If the price of Margin Call or liquidation is not specified or equals zero, it means that the margin is enough to cover losses. Such position will not close.

Commissions

Transfers between spot and margin wallets are not paid. But there are several types of commissions for working on the Margin platform:

• For funding.
• Here’s to forced closure.
• To the trade.

Funding fees are assessed each time an offer is opened using borrowed funds. Forced closing fees are charged if EXMO liquidates the user’s position to limit potential losses. Fees are charged on the size of the position. In addition to this fee, a taker fee is charged for closing with a market order. Fees on the platform are charged in the currency of the margin balance. Funds are deducted for executed orders. If a trader placed an order and then canceled it, no fees will be charged.