Margin trading on the FTX crypto exchange

On the cryptocurrency exchange FTX there is a possibility of margin trading, i.e. trading with leverage or leverage, on borrowed funds, both on the market and in the market futures. You can connect to margin trading in the trading terminal on the website ftx.com.

Spotlight

On the home page crypto exchangesThe “Spot” section, and in the list of assets, select the desired pair. In the trading terminal that opens, to the right of the “Last trades” column, you can see the “Margin trading” option.

If leverage trading is disabled, click on the “Disabled” link to enter the “Profile” page, and there, via the “Margin” button in the navigation bar on the left, go to the “Margin Spot Trading” page and click on the “Enable Margin Spot Trading” option. The leverage options are listed below the enable button: the size of the trading leverage, the currency collateral and the inclusion of exchange tokens as collateral FTT. The following are taken as collateral for leverage BTC, USDT, ETH, BNB, PAXG, XAUT, KNC, BCH, LTC et al.

The “View Borrowing” function opens the table of coins in which the user can borrow. Here it is also possible to see the size of the hourly rate, both past and present, and the liquidation price of the position. The table is complemented by a number of options, which are activated in the upper right part of the table. Among them are the search for the desired currency, downloading the table as a CSV and printing, displaying or hiding columns (drop-down menu), filters and the ability to hide the coins that were not used for the loan.

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Loan history is located below the currency table, where you can enter loan parameters such as loan date, loan currency, loan amount, hourly rate, loan amount, and its equivalent in dollars. There are additional options on the left side, including a filter by loan date. Under the personal loan history is the “Global Loan History” where you can see the leverage dynamics by date, currency, loan amount, and funding rate.

It is possible to take credit for margin trading after the account deposit has been replenished. Based on the amount on the deposit, the trader will be offered credit terms. The “Margin Spot Trading” service also has a “View Credit” button. It activates the page with the terms and conditions for the creditor. The table on the “Margin Lending” page shows the statistics of loans issued by currency and amount for the last 24 hours, the Previous Lending Rate and the Estimated Next Lending Rate, as well as the minimum funding rate.

To start the process of granting a loan, you need to click on the “Loan” function, the service window “Create a funding proposal” will be activated. Here you select the currency of the loan, its amount, the minimum hourly and annual rates. The offer can be withdrawn, but if the amount of funds offered earlier is the same as the amount demanded by the borrower, the lender’s funds will be frozen for 1 hour. The rate offered by the borrower is not the final rate, but the minimum. If the average loan rate is higher, the borrower will pay according to it.

Futures

Go to the futures section in the “Futures” tab on the home page. In the table of futures it is necessary to choose a suitable one and go to the trading terminal. The terms of margin trading are indicated under the “Deposit” function.

When there are funds on the trader’s deposit, the leverage terms will specify the parameters of total and available collateral. By default, for entry-level accounts in futures trading, 1X leverage is available with a minimum support margin of 3%. The ability to borrow funds for margin trading is activated after a deposit is made.

Shoulder tokens

BULL, BEAR, HEDGE and HALF leveraged tokens are a specific trading asset of the FTX platform, ERC20 tokens that can be traded on leverage without having to delve into the intricacies of margin trading. To understand the principle of trading and the balance of profits and losses, you must read the “Step-by-Step Guide to Leveraged Token Trading”. But the main quality of the financial product is rebalancing, i.e. the process of buying and selling token to restore the leverage size, which takes place daily, without user participation.

Rebalancing aims to ensure that the system reinvests profits if the position is in surplus or gets rid of the asset in a timely manner so that the position is not liquidated and the trading process continues. The features of leveraged tokens include the fact that the client who invested in this asset can withdraw tokens immediately to his wallet, unlike other positions with margin.

Leveraged tokens are tied to FTX perpetual futures trading and are traded in pairs with exchange-traded tokens. Accordingly, trading of BULL, BEAR, HEDGE and HALF tokens follows the price movements of futures, the same funding rates apply and more. Leveraged tokens are traded in the “Leveraged Tokens” terminal, which can be accessed from the homepage.