Kataryna Habeliia December 18, 2020
Table of Contents [hide]
- 1 Soft & Margin and OTC Trading on BitXmi from December 25
- 1.1 Margin trading
- 1.1.1 Example
- 1.2 Spot market
- 1.3 OTC Trading
- 1.3.1 How is OTC trading different from exchange trading?
Soft & Margin and OTC Trading on BitXmi from December 25
BitXmi crypto exchange is opening new frontiers. Now trading will become even more convenient and accessible with new functions. Join us and trade with leverage, buy and sell high volume cryptocurrencies with OTC trading, and make instant spot trades. Soft & Margin and OTC Trading will be available on BitXmi from December 25th.
Margin trading is borrowing funds to close a deal. In other words, it is a form of credit that can be used for trading. The borrowing itself is called “leverage”. Leverage of 20: 1 means that for every dollar in the account, you can raise $ 20. This risky investment strategy is becoming more common in the cryptocurrency environment.
Margin trading can increase profits if the trade is successful. Imagine that without margin, you make a $ 25 trade and earn $ 10 on the transactions. When a 20: 1 leverage is used, which means the trade is now worth $ 500, the profit rises to $ 200. An initial $ 500 plus interest is paid, and the trader gets an impressive amount.
The spot market is a market with special conditions for the settlement of transactions between traders. And all orders in this market are called cash or spot orders. Such a market is characterized by the instantaneous emergence of property rights at the time of the transaction. This is precisely the main distinguishing feature of transactions in the spot market.
Prices in this market show the current and most real situation. By tracking the movement of these prices, you can quickly understand the main trends that exist on the trading floor. On BitXmi, after registering and opening an account, you are already on the spot market by default and you also have all the settings for the spot market.
OTC stands for Over-the-Counter. This term refers to OTC trading carried out directly between customers and market makers. In such a case, the seller and the buyer enter into a transaction directly with each other, usually with the assistance of third parties.
How is OTC trading different from exchange trading?
When trading on the exchange, to conduct a large transaction, you usually need to make many small transactions, the rates in which may vary. Liquidity and volatility determine the number of transfers required, as well as the range of rates. The price fluctuations commonly seen in the cryptocurrency market can significantly increase trading costs and hurt market participants.
During OTC trading, clients are limited to one large trade, which allows them to increase efficiency and avoid complications with the execution on different crypto exchanges. In addition, the transaction is not recorded in the order book of the site and is not displayed publicly, which allows achieving a higher level of privacy.
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