Introducing Spot Margin Trading on FTX
A surprisingly large number of us come from a trading background. And as traders, we think a lot about capital efficiency and liquidity. This is reflected in some of the fundamental decision on the platform including subaccount-wide cross-margining system and easy ways to access leverage.
Today we’re introducing spot margins which allows users to borrow additional funds for trading. Previously, when using FTX for spot markets, you must have adequate balances in the quote currency to exchange for the base currency. So if you had $10 in your account, you could only buy crypto worth upto $10 in the spot market.
But what if you wanted to enter into a short position? Or you felt that a particular asset would 🚀 and wanted to take a more aggressive position? Now, so long as you hold sufficient collateral you may be able to enter those trades.
But who are you borrowing the funds from and how much?
When you open a margin position, you’re extended funds to cover the entire value of your trade. So, if you have $10 as collateral and buy Bitcoin worth $50, you’d be borrowing additional $40 (position would be $50 in BTC and -$40 USD). And these funds are coming from your peers on the platform who’ve decided to lend out their USD.
And so correspondingly, we’re launching a platform whereby you can elect to lend your assets. For example, if you’ve got BTC that you want to hodl, you can decide to lend it on FTX to get yield from your holding.
You can read more details here: https://help.ftx.com/hc/en-us/articles/360053007671-Spot-Margin-Trading-Explainer
Visit: https://ftx.com/spot-margin/borrows to get started.