WhiteBIT: margin trading at the exchange

Margin trading – operations on the purchase or sale of digital assets, which use borrowed funds. Due to this, the trader can count on higher profits, although the risks are higher. To start such trading, the user needs to make a deposit (margin). Its amount depends on the leverage selected. WhiteBIT (go online) offers these options: 2, 3, 5, 10 и 20.

Positions

This is the name given to the trades that are created in margin trading in order to make money on exchange rate changes. There are 2 types of positions available on the exchange:

• Long – opens to buy to make money on the growth of the rate.
• Short – is created to sell for a profit on the decline in the rate.

Also in margin trading on crypto exchange WhiteBIT uses the concept of P&L (profit/loss). It shows the change in the open position in relation to the market price. This parameter allows estimating how profitable a position can be at the current moment. In this way it is possible to analyze and make decisions about open positions more accurately.

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Margin call

There is also the concept of a Margin Call when trading with borrowed funds on WhiteBIT. This is a notification to the trader that a position is losing. If no action is taken, it may soon be liquidated. After such notification, the user may have time to react to the market situation and choose one of the solutions:

• to replenish the margin balance, thereby increasing the position, leaving it open;
• close the position.

Liquidation

In the event that the volume of invested funds of the user decreases due to the market situation, liquidation of the position can occur. It is autoclosing at the current price with the return of the borrowed amount.