ftx margin trading

 

How do you enable spot margin trading?

To enable spot margin, visit your Profile page, click on the Margin section and select “Enable Spot Margin Trading”. If you turn spot margin on, then your account will attempt to borrow any spot assets that it is short.

ftx margin trading

Keep in mind that with spot margin enabled, rather than selling your non-USD collateral whenever your USD balance dips below certain thresholds, your account will automatically borrow the negative USD balance via the spot margin market and pay the prevailing USD borrow rate. More details on this here.

How FTX automates borrowing

There are a number of different ways to implement margin trading and borrow/lending. FTX’s is the most automatic in the industry, though the user still has full control over their borrowing and lending. Rather than requiring discrete actions to request borrows, receive them, move the funds, open/close positions, etc., the entire process is abstracted away into net balances.

As long as you have sufficient margin, you can borrow spot tokens simply by spending beyond your account’s balance of them.

So say that you have $50,000 (USD) in your account and nothing else. If you sold 1 BTC for $20,000 in the spot BTC/USD orderbook, your total balances would then be: +70,000 USD; -1 BTC. You didn’t have the BTC and so had to borrow it in order to sell it. FTX does this automatically when you sell, sending an order to the funding book on your behalf to borrow 1 BTC.

You can even do this with withdrawals! If your account has 3 BTC and nothing else, you can request a withdrawal of 1 ETH (despite not having any ETH!). FTX will automatically request a borrow for 1 ETH for you, and you can then withdraw that ETH. Note, however, that you cannot borrow to withdraw for greater size than is available and unused in the borrow-lending book!

So there’s no need to manage collateral vs margin positions vs withdrawable tokens vs margin trading vs spot trading. The same commands (buy/sell/deposit/withdraw) work normally and are allowed as long as your account has enough total collateral to support the necessary borrows.

Spot Margin Trading

Your spot margin positions are cross-margined with your futures positions; there is no separate spot margin requirement you have to monitor.

ftx margin trading

Generally, the way that futures margin works is that each contract has a margin requirement (initial margin fraction to open a position and maintenance margin fraction to avoid liquidation), and you need a total collateral value which meets those thresholds.

Spot margin is similar. The position size of a spot margin position is the notional size of any short (negative) balances you have. So for instance if you have + $65,000; -2 BTC; and BTC is trading at $20,000, then the size of your spot margin position is $40,000 (2 BTC * $20,000 per BTC). This is treated the same as if you had a $40,000 futures position on, and requires initial margin to increase and maintenance margin to avoid liquidation.

Can you margin trade on FTX?

FTX US supports margin trading in its spot markets for qualified users. Note that margin trading carries risk; chiefly it opens your account up to the possibility of liquidation.

How does FTX margin lending work?

How does borrowing/lending work? If you have spot margin trading enabled, then you can lend out one spot token in order to borrow another; for instance you could lend out $50,000 in order to borrow 1 BTC. That USD would then be locked up and potentially loaned out to another user; you would receive interest if it was.

Who pays initial margin?

Key Takeaways

Initial margin is the percent of a purchase price that must be paid with cash when using a margin account. Fed regulations currently require that the initial margin is set at a minimum of 50% of a security's purchase price.

How do I enable leverage on FTX?

Convert. You can also buy or sell leveraged tokens directly from your wallet page using the 'CONVERT' function. If you find a token and click 'CONVERT' on the right hand side of the screen, you'll see a dialog box in which you can easily turn any of your coins on FTX into the leveraged token.

Is margin trading same as futures?

In a futures trade there are only two parties. There is the buyer of the future and the seller of the future. Margin trading, however, becomes a tri-partite transaction with the financer of the transaction that provides margin funding also becoming a part of the transaction.

Can I short on FTX?

Traders can use FTX.com to short Bitcoin with up to 100x leverage, with options contracts for Bitcoin and a range of other top cryptocurrencies.