Kraken Launches Margin Trading

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Kraken is pleased to announce the launch of margin trading. Margin is an exciting instrument that allows clients to amplify their trading profits and gain in both up and down markets.

Kraken is now one of the few exchanges allowing clients to trade bitcoins on margin.

Margin trading is available to clients who have verified their accounts to Tier 3 or Tier 4. Click here to learn more about how to become verified to Tier 3 or Tier 4. Currently margin trading is only available for the bitcoin-euro currency pair (XBT/EUR). However, clients can margin trade the XBT/EUR pair using their USD balance.

At launch, Kraken is offering up to 3x leverage, meaning that a margined position can gain 3x more than the underlying move in bitcoin price. A 4% gain in bitcoin price means a 12% gain in a 3x long position. Traders can also leverage their profit when the market drops. A 4% drop in bitcoin price means a 12% gain in a 3x short position.

Opening a margin position is as simple as toggling a button in the order form to select the level of leverage and all the other order details work the same way they do for normal trades, including the many advanced order types Kraken supports. Things are similarly simple for those who margin trade through Kraken’s API interface.

Open positions are easily closed with an opposing leveraged order. If you go long 3 bitcoins with a leveraged buy order, you can close the position by selling 3 bitcoins in a leveraged sell order. Or you can just close part of the position in a smaller sell order. You can even close a position and flip sides to an opposing position in one order, e.g. closing a 3 bitcoin long position and flipping to a 3 bitcoin short position by selling 6 bitcoins in a leveraged sell order.  

Initially there is no extra fee for margin trading. You simply pay your normal trade fee on the opening and closing volume of the margin position. So if you would normally pay 0.10% for a trade, you will pay 0.10% to open a margin position and 0.10% to close that position. Positions open for more than 24 hours will also be charged a 0.05% renewal fee to keep the position open for the next 24 hours. Traders who wish to avoid this fee should close their position within 24 hours.

For more information on the benefits and risks of margin trading, please see Kraken’s Trading Guide and FAQ.