What is Margin Trading?
Margin Trading is a trading method of gaining more profits by borrowing funds from a third party and amplifying the trading amount. The whole process of Margin Trading on MEXC includes: Opening a Margin Trading account -> Asset transfer -> Start Margin Trading (Buy/Long or Sell/Short)
Step 1: Open a Margin Trading account
After logging in to your MEXC account, click [Margin] on the top menu bar to start.
Step 2: Asset transfer
In this case, we will be using BTC/USDT margin trading pair as an example. The two tokens of the trading pair (BTC, USDT) can be transferred to the Margin Wallet as the collateral funds. Click [Transfer], choose the tokens and fill in the quantity you want to transfer to your Margin Wallet then click [Transfer now].
Step 3: Loan
After transferring the tokens to your Margin Wallet, you are now able to use the tokens as collateral to borrow funds.
Click [Loan] under the [Normal] mode. The system will display the amount available for borrow based on the collateral. Users can apply the loan amount according to their needs.
Step 4: Margin trading (Buy/Long or Sell Short)
Users can start Margin Trading once loan is successful. Here's what Buy/Long and Sell/Short means:
Buying long on Margin Trading means expecting a bullish market in the near future to buy low and sell high whilst repaying the loan. If the price of BTC is expected to increase, you can choose to borrow USDT to buy BTC at a low price and sell it at a high price in the future.
Users can choose between Limit, Market or Stop-Limit in [Normal] or [Auto] mode to buy/long BTC.
When the price of BTC goes up to the expected price, user can sell/short BTC by using Limit, Market or Stop-Limit.
Selling short on Margin Trading means expecting a bearish market in the near future to sell high and buy low whilst repaying the loan. If the current BTC price is 40,000 USDT and it is expected to drop, you can choose to go short by borrowing BTC.
Users can choose between Limit, Market or Stop-Limit in [Normal] or [Auto] mode to sell/short BTC.
When the price of BTC goes down to the expected price, users can buy BTC with a lower price in Margin Trading to repay the loan and interest.
Step 5: Apply for repayment
Users can proceed with repayment by clicking [Assets - Account] - [Margin account]. Look for the tokens you have applied loan for (BTC, in this case), and click [Repayment]. Select the order that you would like to repay, key in the amount for repayment and click [Repayment] to proceed. If there is an insufficient amount for repayment, users have to transfer the required tokens into their Margin account to make the repayment in time.
How to trade Margin in [Auto] mode
MEXC also provides Margin Trading in Auto mode to simplify trading processes and enhance user's experience.
In the [Auto] mode, users do not need to manually borrow and repay the assets. Our system will determine whether to borrow assets based on the funds in users’ Margin account.
If the assets needed are more than the available funds, our system will automatically borrow the tokens in the required amount, calculate the interest fee and place the order. Once users withdraw the order when it’s filled or partially filled, our system will automatically return the borrowed token to reduce users’ interest fees caused by idle loans.