How to short with leverage on Poloniex

Shorting with leverage involves significant risk and requires careful monitoring of market price and leverage levels to manage potential losses.

Nov 29, 2024 at 04:02 am

How to Short with Leverage on Poloniex

Step 1: Open Margin Trading Account

• Navigate to the Poloniex website and log in to your account.
• Click on "Margin" in the top menu.
• If you haven't already, you'll need to enable margin trading by clicking "Enable Margin Trading."
• Follow the on-screen instructions to complete the process.

Step 2: Choose a Trading Pair

• Once your margin account is enabled, you can choose a trading pair to short.
• Select the "Markets" tab from the top menu.
• Filter for the trading pair you want to short, ensuring that it supports margin trading.

Step 3: Short Sell (Establish Short Position)

• Hover over the trading pair you selected and click "Sell" in the "Margin" column.
• Enter the amount of the asset you want to short (e.g., 1 BTC).
• Select the "Short" order type.
• Enter your desired leverage (e.g., 2x).
• Review the order details and click "Sell BTC."
• Your short position is now established.

Step 4: Monitor Your Position

• Click on the "Balances" tab from the top menu to view your open positions.
• Your short position will be listed under "Margin Positions."
• Keep an eye on the market price of the underlying asset and your leverage level to manage your risk.

Step 5: Close Your Position (Cover Short)

• When you're ready to close your short position, navigate to the "Balances" tab and click "Close Position" next to the short position.
• Enter the amount of the asset you want to buy to cover your short (e.g., 1 BTC).
• Select the "Close Short" order type.
• Enter your desired leverage (e.g., same as your original leverage).
• Review the order details and click "Buy BTC."
• Your short position is now closed.

Additional Considerations

• Risk Management: Shorting with leverage involves significant risk. Monitor your positions closely and adjust your leverage accordingly to manage your risk tolerance.
• Margin Call: If the market price moves against your short position, you may receive a margin call. This occurs when your equity falls below the required maintenance margin. If a margin call is unmet, your position may be liquidated automatically.
• Fees: Poloniex charges fees for margin trading, including trading fees, borrowing fees, and overnight fees. Familiarize yourself with the fee structure to optimize your trading.
• Stop-Loss Orders: Consider placing stop-loss orders to limit your potential losses in case the market price moves against you.