“We are pleased to announce the launch of margin trading for Bitcoin Cash (BCH) and Ripple (XRP),” the popular exchange Kraken announced. “The addition expands our margin offering to 8 assets, including Bitcoin (XBT), Ethereum (ETH), Ethereum Classic (ETC), Augur (REP), Monero (XMR), and Tether (USDT).” The San Francisco-based cryptocurrency exchange is one of oldest and most respected in the ecosystem.

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Kraken launches Bitcoin Cash (BCH) and Ripple (XRP) margin trading

Margin trading for BCH and XRP will commence in pairs with XBT, USD, and EUR. Leveraged amounts are BCH/XBT – 2x, BCH/USD – 2x, 3x, and BCH/EUR – 2x, 3x; XRP/XBT – 2x, 3x, XRP/USD – 2x, 3x, 4x, 5x, and XRP/EUR – 2x, 3x, 4x, 5x.

Borrow limits are dependent upon user account verification, divided into 4 tiers:

Bitcoin Cash

Tier 1: 1 BCH

Tier 2: 5 BCH

Tier 3: 50 BCH

Tier 4: 500 BCH

Ripple

Tier 1: 5,000 XRP

Tier 2: 25,000 XRP

Tier 3: 250,000 XRP

Tier 4: 2,500,000 XRP

Not Collateral Currencies

Open fees are 0.02% and rollover fees are the same per 4 hours. Kraken has two platforms, one they claim has a slightly more intuitive interface, and margins are available on both. “If you haven’t tried the new platform yet we highly recommend it,” the exchange explained, “most clients prefer it for the improved UI, integrated charts and tools. Also, it supports mobile trading.”

The announcement was also keen to stress neither crypto is considered a collateral currency, which would allow traditional margin trades to open positions against crypto balances.

“For this reason,” Kraken notes, “you should always maintain adequate balances of other collateral currencies to maintain your margin positions. Be extremely careful when trading collateral currencies for BCH or XRP when you have margin positions open, since this will reduce your account equity and could possibly lead to the liquidation of your margin positions.”

Caution

Advantages to a margin trade include the ability to leverage balances for potentially greater profits, but they also come with ever bigger gambles and potential losses. “If you are unfamiliar with margin trading and how it works, you can learn more about it by visiting the two sections on margin trading in our Support Center,” the announcement urged.

The area is for sure a new one for many crypto traders, and the exchange is well aware. The bulk of the notice’s conclusion is a series of cautions. If losses incurred are substantial, “your margin positions can be forcibly closed in order to protect the funds you borrowed to open the positions. This means that you may be forced to take a large loss on a trade rather than having the option to try and wait for a more favorable price.”

Margin trading is tantamount to a form of credit, and can heighten the market experience and provide liquidity and price action. But, again, the dangers are real for every user, especially novices in a notoriously volatile market. “Make sure you take the time to fully understand how margin trading works and the risks involved before you start,” Kraken warned.

SOURCE: Kraken

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