Margin Trading allows users to trade assets on borrowed funds in the crypto market. It amplifies trading results so that traders are able to reap larger profits on successful trades. Similarly, you are also at risk of losing your entire margin balance and all the open positions.
Steps to start Margin Trading:
Activate Margin account -> Asset transfer -> Loan -> Trade Margin (Long/Short) -> Repay loan & interest
I. Activate your Margin account
On the Margin Trading interface, all available margin pairs will be shown on the right column (MEXC currently supports isolated margin only).
1. Click [Transfer], choose the preferred token and key in the amount that you would like to transfer as collateral. We'll use BTC/USDT as an example.
2. Once the collateral has been transferred, users can start to loan tokens by clicking [Loan] and input the preferred amount.
- Make sure the loan amount is within the amount shown in [Available for loan]
- The hourly interest fee may fluctuate according to the market situation. Please refer to the interest fee shown on the [Loan] dashboard for the latest rate.
3. Once the loan is approved, users can click [Assets - Account] - [Margin account] to check the amount borrowed.
Users can also visit [Order - Margin] - [Loan record] to check loan status, interest fee and amount of unpaid interest.
- Each token has a minimum and maximum loan amount. When the collateral is lower than the minimum loan amount, the available loan amount will reflect as 0. In these circumstances, please transfer the required amount of collateral to your Margin Account.
- Loan amount: Successfully applied loan
- Available for loan: Remaining amount that can be borrowed
III. Margin Trading (Buy long or Sell short)
Users can start to trade on Margin, which involves going long or selling short.
[Buy Long]: Using EOS/USDT as an example: By going long, users can borrow USDT to buy EOS at a low entry point. Once the EOS price increases, users can then sell the EOS tokens and return the borrowed USDT and interest fee. The balance would be the users’ profit from the trade.
1. Users can buy long in Limit Order
2. When the price of EOS rise to the expected price, users can sell short in Limit Order
[Sell Short]: Using EOS/USDT as an example: By going short, users can borrow EOS to sell, exchanging it to USDT at a high entry point. Once the EOS price drops, users can then buy EOS tokens and return the borrowed EOS tokens and interest fee. The balance would be the users’ profit from the trade.
1. First, apply a loan for EOS.
2. Once the loan is successful, sell short at a high price.
3. Once the price falls to the expected level, buy the tokens in the Margin tab at a lower price and repay the loan and interest.
Margin trading uses a fraction of your assets to potentially earn a bigger profit. Accurate prediction of future price movements can allow you to earn a higher profit. However, if the market moves in the wrong direction, the loss will be significantly bigger. As such, users should avoid taking on highly leveraged trading positions to avoid the liquidation of assets.
IV. Loan and Interest Repayment
1. Users can repay the loan and interest by visiting [Assets - Account] - [Margin account].
2. Click [Repay] and select the order you would like to proceed with. Key in the quantity to repay, verify the amount and click [Repayment]. (If there are insufficient tokens for repayment, users have to transfer the required amount into the Margin account to successfully repay the loan.)
- Interest Fee: The interest fee will be calculated on an hourly basis. The system will start the fee calculation on the actual loan time of the user. Starting from the time of loan approval, every 60 minutes will be counted as 1 hour. Borrowed time less than 60 minutes will also be counted as 1 hour. Fees will be calculated once when the loan is approved, and once every 1 hour thereafter.
- For example, if you use 100 USDT to borrow 1 ETH (interest fee 0.08%), you will repay 1 ETH + 0.0008 ETH = 1.0008ETH. If your ETH balance is less than 1.0008, you have to convert USDT to ETH, or deposit ETH to repay the loan and interest.
- Users are advised to repay the loan and interest in a timely manner to avoid incurring unnecessary charges due to late repayment.