Margin trading is currently only available on Trality for the Code Editor, using the Binance exchange.
Margin trading back test functionality is currently in Beta. The Beta version is backtest only and virtual and live trading will be enabled soon.
Margin trading is very similar to spot trading. In both cases a trade is simply the conversion of one currency for another. The main difference with margin trading is that it introduces the ability for a trader to borrow a currency. While the currency is borrowed interest is paid on the loan. Borrowing gives trader's the ability to short sell the market as well as take more risk. In the case of short selling; an asset can be borrowed and sold immediately on the hope that at a later date the price will be lower. When the loan is repaid, the profit is the price the borrowed asset was sold for and the price at the time the loan was repaid. If a trader has a strong conviction that the price of BTC is going up they can borrow USDT to purchase BTC. This is known as leverage trading since it is possible to take a bigger position in BTC than would be possible without borrowing. This leverage multiplies both the profits and losses as a percentage of the traders account balance so it risky.
How to get started
We advise you to first start or rent a Margin trading bot virtually - as this will allow you to get started immediately and see the benefits of Margin trading with your own eyes.
Live trading with Margin trading is a functionality offered by Binance, but may only be available in certain jurisdictions. Please read our article
on how to create a Margin account on Trality using Binance.
There are 3 main use cases for margin trading.
- Short selling: taking a position that profits from the price of the asset going down.
- Buying on leverage: long only strategy but is able to take more risk than would be possible without borrowing.
- Long/short strategies: These are used by relative value strategies that buy one asset and sell another asset to make money from the relative performance.
There are several order types specifically created for margin trading.
Please find all information and example codes inside our comprehensive margin trading documentation.