According to reports, IDG-backed cryptocurrency exchange KuCoin is set to launch its Margin Trading service, which allows users to apply leverage to their trading through borrowing “crypto valued multiplied original principal for more transaction possibilities.”
However the company didnt reveal the details of the amount of leverage traders will have.
So this means that users will effectively borrow cryptocurrencies, depositing their own digital assets as collateral. If the losses on the account exceed the value of their collateral, their positions are automatically liquidated and the invested money is lost.
KuCoin can change the different levels of risk for different tokens. The maximum leverage or initial margin requirements can also be changed according to the token’s associated risk.
“By selling the lending crypto, users can short their positions to get profit. Margin trading, compared to traditional trading, has the potential for higher profit but, due to price fluctuations and high liquidity, also faces higher transaction risk,” it said in an official announcement.
Share
