This article explores Crypto.com's margin trading, covering order placement, borrowing/repayment, and step-by-step trading tutorials. It also clarifies key differences between margin trading, spot leveraged trading, contract trading, and futures.
What Is Leveraged Trading (Margin Trading)?
Leveraged trading operates similarly to spot trading, where investors buy actual assets. The key difference? Leveraged trading involves borrowing funds from the platform, introducing a "margin" requirement (hence the term "margin trading").
Margin is a financial safeguard—collateral to mitigate platform risk if a borrower defaults or investments underperform.
If margin levels drop below thresholds, platforms may issue margin calls or force-liquidate positions. Additionally, borrowers pay periodic interest fees.
Common in traditional markets (e.g., stock margin loans), leveraged trading lets users amplify capital efficiency—e.g., 3x leverage means using $1 to control $3 in assets.
Summary: Leveraged trading borrows platform funds to magnify gains/losses, secured by margin. Insufficient margin triggers liquidation.
Pros of Leveraged Trading
Amplified Returns
Leverage enables higher profits with less capital. For example:
- Scenario: $10K本金 + 5x杠杆 = $50K exposure.
- Outcome: A 10% asset rise yields $5K profit (50% ROI vs. 10% without leverage).
Note: Interest fees slightly reduce net gains.
Risks of Leveraged Trading
1. Liquidation (Forced Closure)
Platforms auto-sell positions if margin ratios breach limits (e.g., Crypto.com’s "Margin Score" <1.1 for 3x leverage).
2. Interest Costs
Borrowing fees accumulate over time, eroding profits—especially in long-term holdings.
Leveraged Trading vs. Contract Trading
| Feature | Leveraged Trading | Contract Trading |
|-----------------------|---------------------------|-------------------------------|
| Asset Ownership | Directly holds assets (e.g., BTC) | Tracks price via derivatives (no asset custody) |
| Leverage | Typically ≤10x | 5–100x+ |
| Expiry | None | Futures: Yes; Perpetuals: No |
Key Insight: Leveraged trading involves actual asset transactions, while contracts speculate on price movements without ownership.
Crypto.com Margin Score Explained
Crypto.com uses a Margin Score to assess account health:
Margin Score = Total Margin Wallet Balance ÷ (Total Borrowed + Unpaid Interest)
Score Thresholds
- >2.0: Full functionality (borrow/trade freely).
- 1.1–1.3: Margin call (add funds or reduce exposure).
- ≤1.05: Liquidation (positions forcibly closed).
How to Start Margin Trading on Crypto.com
Open a Margin Wallet:
- Navigate to Exchange > Margin Trading and enable the wallet.
- Transfer Funds: Move assets from your Spot Wallet to Margin Wallet.
- Borrow Funds: Select desired leverage (3x, 5x, 10x) and borrow USDT or other supported coins.
Order Types
- Market/Limit Orders: Standard immediate or price-specific trades.
Advanced Options:
- Stop-Loss: Triggers market orders at preset levels.
- Stop-Limit: Combines stop-loss + limit orders (e.g., buy BTC at $41K if it hits $40K).
FAQs
Q1: Can I withdraw funds during active leverage?
A: No—transfers out are blocked until loans are repaid or margin scores improve.
Q2: How is interest calculated?
A: Hourly rates apply; check borrowing terms before trading.
Q3: What happens if I’m liquidated?
A: Positions are sold automatically. You may owe additional funds if the margin wallet is insufficient.
Final Tips
- Monitor your Margin Score to avoid liquidation.
- Use leverage cautiously—higher multiples increase risk.
👉 Explore Crypto.com’s advanced trading tools for optimized strategies.
Disclaimer: Crypto trading carries high risk. This guide is informational only—conduct independent research before investing.
**Keywords**: Crypto.com margin trading, leveraged trading, contract trading, futures vs. perpetuals, margin score, liquidation risk.
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