AscendEX Margin Trading Rules

With margin trading on AscendEX, users can enhance their potential profits while managing inherent risks such as increased volatility and margin calls.

Nov 23, 2024 at 09:58 pm

AscendEX Margin Trading Rules: A Comprehensive Guide

1. Understanding Margin Trading on AscendEX

AscendEX enables margin trading, a method that allows traders to borrow funds from the platform to amplify their trading positions. This feature allows traders to capitalize on potential profits but also exposes them to higher risks.

2. Margin Trading Requirements

To initiate margin trading on AscendEX, traders must:

• Complete KYC (Know-Your-Customer) verification
• Maintain a minimum account balance
• Understand the inherent risks involved

3. Calculating Margin Trading Indicators

Margin trading parameters include:

• Initial Margin: The minimum amount of funds required to open a margin trade.
• Maintenance Margin: The minimum margin ratio that must be maintained to avoid a margin call.
• Margin Call: A situation where the trader's margin ratio falls below the maintenance margin, triggering a forced liquidation to cover losses.
• Margin Ratio: The ratio of the trader's equity to the loan amount borrowed for margin trading.

4. Margin Trading Process on AscendEX

The margin trading process on AscendEX involves several steps:

• Select Trading Pair: Choose the trading pair you wish to trade with leverage.
• Set Leverage: Specify the amount of leverage you want to utilize, multiplied by your initial margin. Higher leverage amplifies both potential profits and risks.
• Place Order: Execute the margin order, indicating your desired position size and direction (long or short).
• Monitor Margin: Keep track of your margin ratio and asset utilization to avoid margin calls.

5. Funding Margin Trading

Margin trading can be funded using the following methods:

• Deposit Cryptocurrencies: Transfer supported cryptocurrencies from your wallet or another exchange into your AscendEX margin account.
• Borrow Stablecoins: AscendEX offers the option to borrow stablecoins such as USDT and USDC as leverage for margin trading.

6. Managing Margin Trading Positions

Traders can manage their margin positions on AscendEX by:

• Placing Stop-Limit Orders: Set automatic orders to close your positions if the price reaches a specific level, mitigating potential losses.
• Adjusting Leverage: Change the leverage ratio applied to the position to increase or decrease your exposure.
• Adding Margin: Deposit additional funds or borrow stablecoins to increase your margin balance and avoid margin calls.

7. Understanding Margin Trading Risks

Margin trading involves the following risks:

• Increased Volatility: Leverage amplifies both potential gains and losses.
• Margin Calls: Failing to maintain the required margin ratio triggers forced liquidation, potentially leading to significant losses.
• Interest Charges: Interest is charged on borrowed funds, which must be considered in the trading strategy.