Margin trading is a form of trading using financial leverage (borrowing money from the platform) that allows you to buy and sell with a larger amount of money than you have. Currently, Remitano Invest supports 2X leverage with 9% / year interest rate, with this leverage doubling your investment, thereby doubling your profits and also doubling risks. And you will have to pay interest on this loan.
1. Choose 2x Margin to double your investment:
The following example will help you better visualize Margin 2X at Remitano
You open an investment order Cardano (ADA) coin with the amount of 50 USDT and choose Margin 2x, which means that you are borrowing more from us 50 USDT to invest ADA.
So your total investment now is 100 USDT (Including your 50 USDT and 50 USDT borrowed from Remitano)
2. Cases in the transaction process:
The next example with an investment ADA will help you visualize the benefits and risks of Margin Trade:
In case the price of ADA increases by 10% compared with the price when you open the investment order, at this time, you close the investment order to take profit at the profit value of 10 USDT. (If you Invest normally, you only get 5 USDT)
In case the price of ADA is reduced by 10% compared to the price at which you opened your investment order, then you stop loss and your loss amount is 10 USDT. (If you Invest normally, you only lose 5 USDT)
In case the price of ADA is reduced by 41% compared to the price at which you opened the investment order, your initial investment will be nearly 0 USDT. The exchange will liquidate the ADA to ensure there is no negative impact on the loan. (If you Invest normally, your initial investment returns to 0 USDT when the ADA price drops 100%)
Note: The above parameters are for reference only. In fact, Remitano will add an investment fee and fixed interest rate of only 9% / year (calculated by a unit of investment hour). However, we only charge a closing fee for profitable trades. Therefore, when you invest a loss, if you close the order you lose only the loan fee.
3. Risk of liquidation when using Margin
When the value of the asset drops to nearly 41%, the Remitano system will liquidate your coin. In other words, the investment will be closed when the value of the investment falls close to the sum of your total initial loan plus interest, in order to avoid negative balance.
To avoid this situation, the platform provides 2 important features to help you preserve your assets against the risk of excessive and negative price drops on your initial investment:
The Warning Risk system will automatically calculate and notify you when your investment order is at high risk of being liquidated.
Auto-stop loss function: Investors proactively setting a reduction will stop the investment order to avoid the risk of being liquidated.
4. Automatic stop loss, take profit function
You cannot go online regularly to track market price movements and take actions promptly, especially at times of high volatility. The automatic stop loss and take profit function will be a tool to assist you in solving that problem, helping you preserve your capital and make better profits.
To set up automatic closings, follow these instructions:
At Investment details: select Settings
You can choose either option or both at the same time, and then enter the desired percentage according to your investment plan (say 10%):
Automatic close when% profit > =: The system will automatically close the investment order when the price increases by 10% compared to the price when you open the order.
Automatically closes when% loss > =: The system will automatically close the investment order when the price decreases 10% compared to the price when you open the order.
Select Apply to complete the Automatic close