CoinEx 丨 CoinEx Launches Margin Trading 2.0 as the Market Changes Rapidly

It’s been 13 years since Bitcoin was introduced as the world’s first cryptocurrency in 2008. Over these years, cryptocurrencies have traversed an unusual path from being misunderstood in the initial, through a household name and an investor darling, to the game-changer in today’s financial industry.

In the traditional securities market, credit trading, also known as margin trading, is an operation where a user pays a certain amount of margins or securities to the securities company that offers it margin trading and short selling functions in the subsequent transactions. With cryptocurrencies going viral, this trading method has also been applied to crypto transactions, where it is called margin trading.

The development course of cryptocurrencies is studded with a variety of derivatives. Cryptocurrency derivatives date back to 2013, but they haven’t grown rapidly until three years ago. The surging derivatives transactions on crypto exchanges constitute telling evidence of investors’ huge demand for financial innovation to enhance the spot market liquidity while providing traders with diversified choices.

Margin trading is basically the same as credit trading in the traditional securities market. It specifically refers to an operation where a user deposits a certain amount of tokens to the trading platform as a margin, then gets a loan up to the margin amount from the trading platform, and finally repays the loan and interest accrued at the preset rate to the platform on the agreed-upon date.

Mainstream derivatives in the cryptocurrency market now include margin trading, futures contracts, option contracts, and leveraged tokens. While some crypto exchanges haven’t recognized margin trading and leveraged tokens as derivatives, these two trading methods that are different from spot trading indeed bring diversified options to users and can do what derivatives do. As of 2021, major crypto exchanges worldwide have all supported spot margin trading and futures contracts.

The Layout of Leveraged Products in Major Exchanges

Now, you may ask, how do the major exchanges layout margin trading products? And what is the focus of their respective business priority? To discuss these two questions, we have summarized the information disclosed by major exchanges in the table below:

CoinEx is expected to support 28 contract markets (10 coin-margined and 18 USDT-margined) and 141 margin markets by August 3.

As can be seen from the table, among the four major exchanges, CoinEx supports the most cryptocurrencies, with a total of 72 USDT margin trading pairs listed. In comparison, Binance supports the fewest trading pairs, only 28 in total, while the other two exchanges support 31 and 33 trading pairs respectively.

And in terms of leverage, Binance and Huobi support lower leverage, currently up to 5x, whereas OKEx and CoinEx support higher leverage, currently up to 10x.

In addition to OKEx, which supports the Cross Margin mode only, all the other three exchanges, BINANCE, Huobi, and CoinEx, support both the Cross Margin and Isolated Margin modes, so users can choose from different modes according to their risk appetite.

CoinEx’s Innovative Margin Trading Is Noteworthy

Compared to its counterparts, CoinEx’s innovative margin trading service has shown better performance in terms of trading convenience, beginner friendliness, and asset security.

Trading Convenience

CoinEx has innovated an automatic borrow/settle mechanism for its margin trading service. With any margin in the account, users can freely borrow any type of leveraged tokens. With no special manual procedure required, when the transaction amount exceeds the principal, the insufficient part will be automatically covered by borrowed funds. And assets credited to the user’s account if in the same coin type of the loans, will be automatically used to settle the loan, thereby eliminating the trouble of manual operation.

Beginner Friendliness

CoinEx users can enjoy a 10-day interest-free period when they borrow cryptos for the first time, as well as 3X, 4X, 5X, or 10X leverage. They can reasonably use leverage in margin trading, adjust the positions, and timely liquidate the positions to take profits or cut losses. CoinEx offers cost-effective services by charging a reasonable service fee for closing positions, supporting a variety of currency types, and calculating market-making rates based on daily interest rates.

At the same time, CoinEx has made a very user-friendly improvement to its risk control mechanism. The platform employs a unique mark price for position closing. When the market fluctuates sharply, it will spontaneously take over the open positions to reduce users’ losses. For users, leverage is a good hedging channel, and CoinEx boasts obvious advantages in the margin market relying on its incomparable liquidity.

As of August 3, CoinEx is expected to support 28 contract markets (10 coin-margined and 18 USDT-margined) and 141 margin markets, one of the most versatile among all the spot margin platforms. On CoinEx, users can have more options to trade in different cryptocurrencies, thus making better digital asset allocation portfolios and effectively hedging trading risks.

Asset Security

In margin trading, the most feared is that the platform’s price fluctuations will lead to forced liquidation. In order to avoid this situation, CoinEx takes an average of the latest cryptocurrency prices (the highest and lowest prices removed) on many popular trading platforms as the fair price to avoid accidentally forced liquidation, thereby effectively safeguarding users’ assets.

The margin market constantly poses challenges to leveraged tokens. All the LT products of different exchanges seem similar, and each appears trustworthy under usual market conditions. But few of them could withstand black swan incidents. So an exchange with reasonable rules, plenty of liquidity, and a good reputation might be more important to investors than the service itself since such a platform can protect their interests.

Recently, CoinEx plans to adjust the interest rate system for margin trading to improve liquidity and better serve its users. With its abundant LT types and excellent user experience, CoinEx has harvested popularity among users and maintained healthy development.

The competition among exchanges has become increasingly intense. In addition to basic trading functions and good user experience, the key to success also lies in distinctive and differentiated quality services and mechanisms. Thus, we have every reason to believe that, with such a wealth of products and services, CoinEx will outperform all of its competitors.