Cobinhood has launched the margin trade solution on its Crypto exchange platform. This feature will be available for COB/ETH, ETH/BTC, ETH/USDT, and BTC/USDT. The announcement was made on Thursday and the platform is expected to be live from today, Friday. Users will of the new feature will have access to margin funding, short selling, and margin trading.
What Is Margin Trading?
Margin trading is an assets market practice where an investor buys more stocks using funds that have been borrowed from a broker. In the case of Crypto markets, margin trading occurs when Crypto investors buy more Cryptocurrencies for speculative purposes more than they can afford. To do this, they use margin accounts rather than the cash account. With the margin account, an investor is able to acquire a limited number of Crypto assets as long as they follow the rules of the platform such as submitting the minimum margin of cash on the account and so on.
The immediate benefit of the margin of trade practice is that an investor can be able to reap benefits from investing in high-return Digital assets when they are out of cash. This offers flexibility and financial benefits that the cash system cannot offer. However, there could be risks to both the Crypto exchange- who acts as a broker in this context, when the stocks fail to yield when a bear run occurs.
CobinHood will Be Competitive
In addition to offering margin trading, the Crypto exchange platform will also be offering margin funding and short selling. The reported statement revealed that margin trading on CobinHood platform will give traders an unlimited access to an additional three times more leverage than what was previously provided through the additional crypto pairs that include ETH/USDT, COB/ETH, BTC/USDT, and ETH/BTC.
Secondly, margin funding will be made available to traders who exchange Cryptocurrencies such as COB, ETH, and BTC on one hand and also the US Dollar- tied Tether coin (USDT). In this category, traders will be offered Cryptocurrency funds in exchange for gains that have been earned on the funding amounts that have been provided.
Lastly, short selling will be made available for the trading pairs that are offered under margin trading. This option will enable traders to reap higher returns while accessing three times more leverage.
The Chief Technical Officer of CobinHood, Wei-Ning Nuang, has expressed optimism about the improved version of features. He said that CobinHood, unlike other Crypto exchanges, is keen to offer innovative features to grow Crypto markets.
CobinHood Crypto exchange platform was launched in 2017. It claims to be the first Crypto exchange in the world that that has a high-frequency Cryptocurrency trading platform and a fee-free strategy. At the beginning of 2018, the platform launched Dexon, that is believed to be the fasted decentralized Blockchain platform in the world. This platform has unique features that offer scalability and low latency that has the potential of making it appeal to banking companies.
Further, from today, CobinHood will list XRP and NEM. For Ripple, investors will be able to trade, deposit and withdraw XRP/BTC and XRP/USDT. For NEM, XEM/BTC and XEM/USDT will be available.