The striking growth and popularity cryptocurrency and crypto exchanges have achieved over the years have caught the eyes of the universal wide-spread media and potential investors from all over the world. From an academic concept to reality, cryptocurrency and crypto exchange businesses have come a long way and have entered the spaces of almost every major industry that has transformed digitally.
Many newcomers are aspiring to invade the cryptosphere with their cryptocurrency exchange software, but the constant price fluctuations in the crypto values make them uncertain and bring in fear of missing out. This is where cryptocurrency leverage exchange comes into play and makes it easy for the customers. A leverage exchange platform brings in zestful opportunities and advantages for investors, like never before, which is why it attracts more traders than any other existing exchanges. But, what is a crypto exchange leverage? How does it work? And how does it benefit? Let’s find out.
What is meant by crypto leverage trading?
A Cryptocurrency exchange with leverage allows traders to borrow funds from other users or directly from the exchange to initiate trades quickly and efficiently, and expand their position in the market. Simply put, instead of investing the full market value of an asset, a leverage exchange platform allows the trader to operate on a margin: leverage ratio, the leverage value being substantial than the margin the user deposits in the exchange. It helps investors with fewer chances of being prone to price fluctuations and conduct trades without being affected by it, with a minimum margin investment.
Let’s quickly look at an example that will help you understand the above-mentioned explanation, distinctly.
How does a crypto leverage platform work?
A leverage/margin exchange platform allows an investor to deposit a margin of 1BTC and expand the trading position upto 100 BTC value.
So, Now, Imagine the current bitcoin value is $13,000.
And within short turnaround time, the value is expected to go up to $13,500.
But unfortunately, you have only one bitcoin and cannot make use of the opportunity.
In the case of a leverage exchange platform, you can deposit the 1BTC as the margin and leverage upto 100, which multiplies the value upto $13,50,000.
Thus, when the BTC price increases, you will make a profit of $10000 instead of the actual gain of $500.
There is a wide range of exchange platforms available in the market, but why should you invest in cryptocurrency exchange with leverage? What are the other reasons than the one mentioned above, for you to choose a leverage platform for your business? Let’s take a look.
Chief advantages of a leverage/margin exchange platform
Option to go short/long
A leverage exchange platform allows the trader to go short/long, which is highly beneficial both to limit losses and boost profits. Going short means, the traders will open a short position to not be affected, if they expect the price values to decline. Going long means just the opposite. The traders will take a long position if they expect the price to rise, to amplify their profits.
The leverage exchange platforms are useful to investors, as well as the exchange owners, as it allows them to attain greater returns by collecting transaction fees for the trades happening on their exchange platform.
Increased access and 24/7 trading
As leverage exchange platforms allow trading with a minimum margin deposit, it paves the way for small-time investors to also participate and incur huge profits for their business. Also, the trading platform is available 24/7 to global customers. Anyone from anywhere in the world can conduct trades at any time.
Flexibility to shake up funds
In this platform, users can also utilize their unused funds, making them available for leveraging, and in return, gain enormous profits.
The exchange automatically liquidates the trader’s position once they hit the bankruptcy limit, which will reduce the risk factors and minimizes loss values for the investors.
What are the essential features of a legitimate crypto leverage platform?
- Perennial contracts
- Dominant trade matching engine
- GDPR compliance
- Smart order routing
- Partial trade closing options
- Social/copy trading
- Multi-account management
- CFD/FX leverage options
- Accumulated price feeds
- Trading bonuses
- Payment gateway integration
- Marketing tools
- Enhanced security
Few strategies that will help you flourish in your leverage exchange business
- Beginning with a smaller trade position and expanding it over time.
- Make use of demo/paper trading.
- Understand how Take Profit (TP) and Stop Loss (SL) functionality works and use it right.
- Fragmenting the trade positions into separate portions.
- Setting clear-cut goals and consistently follow them.
- Analyzing market trends, requirements for the exchange, market price values, legal frameworks involved, etc.
Why leverage exchange is the most fitting solution for the current situation?
Leverage exchange platforms are all about allowing users to borrow large sums than their minimum margin investments. In this current COVID-19 situation, market prices have been profoundly fluctuating. In this scenario, there is no better solution than a crypto leverage exchange, as your minimum investment is less, but the profits are higher, and with its exclusive options like Take Profit (TP), Stop Loss (SL), and risk-management strategies rightly used, you can conduct a risk-free, hassle-free business.
The demand and urge for cryptocurrency leverage exchange software are highly booming, and if you want to own a leverage platform, there is no better time than now. So, make use of this favourable opportunity soonest and boost benefits and profits for your business.
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