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Cryptocurrency Trading: A Deep Understanding of Leverage/Margin Exchange Platform

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The stress on the fact that the exchange does not suffer any losses is quite inviting a statement to make whitelabel leverage crypto exchange a lucrative business. It is quite easy to kickstart your business provided you meet the regulatory requirements, and establish your compliance. All you need to do is either create your crypto exchange platform with leverage from scratch or purchase white label cryptocurrency exchange software with leverage. – PowerPoint PPT presentation

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Date added: 15 June 2020
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Title: Cryptocurrency Trading: A Deep Understanding of Leverage/Margin Exchange Platform


1
Cryptocurrency Trading A Deep Understanding of
Leverage/Margin Exchange Platform
2
Introduction
  • What is leverage trading?
  • What is buying on margin?
  • Working of leverage Trading
  • Conclusion

3
What is leverage trading?
  • In simple terms, leverage trading is a trait that
    is executed by using borrowed shares from your
    broker to increase the size of your portion in a
    play so that you can make more money on the other
    side.
  • There are different types of leveraged trades
    like options, futures contracts, and buying on
    margin. Among all of this, buying on margin is
    considered to be the most profitable, and
    proportionally, the riskiest.

4
Leverage Ratio
5
What is buying on margin?
  • While buying on margin might seem so
    sophisticated, we have always had an alternate
    terminology that we have taken for granted
    loans! Yes, what we essentially do while taking
    a loan is that you take a considerable chunk of
    cash from an institution that profits from
    lending money to you.
  • If you were to buy a car for 50,000, you end up
    putting down payment of 5000 and borrow 45,000
    over a time period of, let's say five
    years.
  • Every month, you pay an installment for the
    borrowed money, which includes both the
    principal and the interest.
  • Margin trading also has certain factors like the
    multiplier and the amount that you will need to
    essentially have in your trading account.
  • Although the process might be similar, it cannot
    be considered completely congruent because
    buying a car or a physical asset is not the same
    as borrowing for trading.

6
How does leverage trading work?
  • Leverage trading is all about borrowing shares or
    cash to buy shares, or in this context, crypto
    assets for trading from the exchange itself.
  • Leverage is always expressed as a ratio some
    crypto exchanges offer leverage of 21, and some
    even offer leverages as high as 1001.

7
Let us take the example of a 1001 leverage. The
1001 leverage simply means that you can borrow
100 times the amount you have set aside as the
margin. Therefore, if you have 1000, you can
participate in trades that require you to have
100,000. For the sake of convenience, let us
take the price of the Bitcoin to be 1000. If you
have just 1000, you can buy just one bitcoin.
If the price of the bitcoin rises by let's say,
10, you can sell them and get a profit of 10
for that 1000 you have. However, if you were to
borrow 99,000 from the exchange as leverage, you
can trade for 100,000 instead of just confining
yourself to the 1000. This means that you will
not make just a 10 profit but a 1000
profit. Once you have made your profit, you will
have to return the 99,000 that you borrowed to
the exchange itself. In addition, there is also
an interest that is levied on the borrowed
amount.
8
Conclusion
  • The stress on the fact that the exchange does not
    suffer any losses is quite inviting a statement
    to make whitelabel leverage crypto exchange a
    lucrative business.
  • It is quite easy to kickstart your business
    provided you meet the regulatory requirements,
    and establish your compliance. All you need to
    do is either create your crypto exchange platform
    with leverage from scratch or purchase white
    label cryptocurrency exchange software with
    leverage.
  • There are a lot of companies that provide these
    services such as this website, and all you need
    to do is get in touch with them and let them
    know about your requirements.

9
Visit Us
  • Website https//www.infiniteblocktech.com/leverag
    e-crypto-exchange-software
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