Here at Coinmetro, we allow you to trade with borrowed assets by using the Margin Trading Platform. We even offer the use of leverage which allows trading in larger value than your available funds! This allows you to short (sell) assets you don’t own, in anticipation of buying them back later at a lower price and keeping the difference as profit.
1) Fund Your Account
Firstly, you will need to ensure that your Coinmetro account is funded, and head to the Margin Platform! The Coinmetro Margin Platform can be accessed by selecting the Margin tab from either your Coinmetro Dashboard or the Markets page (or you can click this link!).
On the Coinmetro Mobile App
2) Allocate Collateral
You will then need to allocate some funds as collateral. This can be done easily by clicking on 'AddCollateral To Start', choosing which currencies you would like to allocate, and choosing how much by sliding the toggle on the asset's overview page. Then, press 'Save Allocation'. Please note that you can allocate collateral up to a maximum of 50,000 EUR.
Using XCM as Collateral
Should you wish to allocate XCM as margin collateral, here are some important things to keep in mind:
XCM can be added as collateral just as usual
XCM can make up to 30% of your collateral. Meaning, for example, if you wanted to allocate a total of 1000 EUR as collateral, you could allocate up to 300 EUR of XCM and at least 700 EUR worth of other assets
The value applied to XCM will only be 30% of the market value. For example, if XCM is valued at 60c, 20c value will be applied as collateral
You can add a max of €10,000 worth of XCM as collateral.
3) Select Your Trading Pair
4) Complete the Order Form
Now, you will need to complete the order form. You can choose between the Compact and Advanced order forms. The Compact order form lets you specify order type, price (if appropriate, depending on the order type), and trade size. The Advanced order form includes all the fields from the Compact form plus others, including Take Profit, Stop Loss, Time in force, and helpful shortcuts for calculating the trade size. You also need to decide whether you will be trading for or against the asset. For example, if you were to trade against BTC, you would sell (short) it, or if you were trading for it, you would buy (long) it.
5) Open Your Position
Once you are ready, simply press 'Buy (Ask)' or 'Sell (Bid)', then 'Place Order' and your position will open.
You can view your profits/losses here where it says Profit/Loss, underneath Exposure.
It's important to bear in mind that once your Free Margin % hits 0, you will receive a Margin Call via email which will give you a chance to close your positions before getting stopped out, or "liquidated". A stop-out will occur when your Free Margin reaches -70%.
Following our recent platform update, our effort to improve your trading experience is continuing with the introduction of a new Price Warning feature. The Slippage Warning Dialog is there to show you in real time if any of your orders could lose more than 3% due to slippage. This is an important component of your trading arsenal, as it will warn you immediately before confirming orders. Use this to your advantage, so you can be aware, act fast and stay on top of the markets.
The Price Warning Dialog shows up if the user submits an order which could lose more than 3% due to slippage. The mechanism works like this:
No warning is shown when slippage is under 3.00%
It shows a green warning from 3.00% to 4.99%
It shows an orange warning from 5.00% to 9.99%
It shows a red warning from 10.00%+
The calculation takes the size of the order into account and adjusts the slippage warning percentage accordingly
It will appear when placing a new market/limit order or editing an open order
It will appear on both the Exchange and Margin platforms.
What does it not do:
Take spread into account (for now)
It will not appear when doubling or closing a % of Active Positions on Margin (for now).
- How can I close an open position?
An open position can be closed manually or automatically. To close a position manually, you need to select the position in either the Position Summary or Positions panel, then click Close. Be aware that any position can be closed automatically in any of the following scenarios:
The Take Profit price is hit, resulting in the position being closed at the specified price or better. Note: if the Take Profit is only touched on thin volume without trading through it, your position might be only partially closed, or not closed at all.
The Stop Loss price is hit, resulting in the position being closed at the current market price, possibly incurring slippage.
Your Free Margin % drops to -70%, triggering a stop out, which closes all your margined positions for a heavy loss. To avoid this from happening you should employ good risk management, for example by using stop losses and risking only a small amount of your collateral per trade.
Here at Coinmetro, a Margin Call is triggered when your Free Margin drops to zero due to open losses. You will be notified about this and will be unable to place new trades until your free margin becomes positive again.
- How is Margin trading calculated?
Margin Trading is calculated using the following metrics:
Available Margin - this is your Collateral Value minus Unrealized Loss.
Example: If your allocated collateral is valued at $10,000 USD and you have open positions with unrealized losses of $2,500, then your available margin would be $7,500.
Used Margin - All open orders on Margin trading are called Used Margin
Example: If the net exposure (value) of your open orders and positions is $24,000 and your account leverage is 5:1, then your used margin would be $8,000.
Free Margin - This is basically your Available Margin, but it can turn negative in case you have open positions with unrealized losses.
- How can I change the margin currency?
The margin currency can be changed from the left-hand side of the margin info bar:
The margin currency can be set to GBP, EUR, XCM, or BTC. It is the currency in which all margin values, P/L values, and collateral values will be displayed. You can change the margin currency at any time.
Coinmetro’s Demo Platform is always available if you would like to practice without risk. Please note that this article is not to be seen as trading or financial advice. It is for educational purposes only.