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Bitfinex is the longest-running and most liquid major cryptocurrency exchange. Founded in 2012, it has become the go-to platform for traders & institutional investors.

Bitfinex

Margin Trading, also known as Leveraged Trading, is a strategy of trading crypto assets that involves borrowing funds and allows traders to leverage their positions with higher funds than they have.

Bitfinex allows users with Basic Plus Verification* level and above to trade with up to 10x leverage by receiving borrowed funds from the peer-to-peer (P2P) market on the Margin Funding platform.

*Important:

• Margin Trading, Margin Funding, Bitfinex Borrow, and Lending Pro requires at least Intermediate level verification for all Bitfinex accounts created after March 1, 2022. Only Bitfinex accounts created before March 1st, 2022 will be able to access these features with Basic Plus verification.

You can enter an order to borrow the desired amount of funding at the rate and duration of your choice, or you can simply open a position, and Bitfinex will take out funding for you at the best available rate at that time.

Note: Margin traders must be aware of and accountable for their positions and collateral conditions while trading on Margin.

Please read our Terms of Service and Risk Disclosure Statement to learn more.

What is Initial Equity

Initial Equity refers to the number of funds that a trader must personally put up from their assets.

Note: The initial equity on Bitfinex varies according to the trading pair.

For example, if you want to trade BTC/USD, the initial equity required is 10% of the value of the position you wish to open, but on ETH/USD, the requirement is higher at 20%.

What is Collateral

Collateral refers to assets that a lender accepts as security for a loan. These funds guarantee that you will always repay what you borrowed if you start losing money in a position.

The collateral required to open/increase a position is dependent on the Margin Trading pairs.

For example, if you have 1000 USD in your margin wallet, that 1000 USD will serve as collateral for opening margin positions to a maximum of 10:1, which is a margin position with a USD value of up to 10,000 USD.

The maximum leverage is slightly reduced when holding a currency as collateral that is not the quote currency of the position you wish to open. The quote currency is the second currency of the pair.

Note: The price of an asset is always the quote currency.

Additionally, haircuts, which are the difference between market value and collateral value, will be applied for specific tokens used as collateral for Margin Trading. Haircuts reduce the USD value of certain currencies by a set percentage, and the leverage will be applied to the new reduced value of the collateral.

For example, ADA has a collateral haircut of 70%. This percentage means that its leverageable value is reduced by 70% when held as collateral. Therefore, if you hold $100 worth of ADA in the margin wallet, only $30 worth (30%) will contribute to your collateral.