Bitfinex simplifies margin requirements as it paves way for new products
Bitcoin exchange Bitfinex announced that effective Monday, it will be updating and streamlining its margin rules.
Bitfinex is one of the few exchanges allowing traders to trade bitcoins on margin.
They will be scrapping the "choose your leverage" feature, which previously offered a choice of 1:1, 2:1 and 2.5:1. The vast majority of traders chose the maximum value. Instead, a fixed maximum margin will be assigned to each product based on its Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.
The "Tradeable Balance" will now account for all collateral indicated within a given pair (e.g. BTC/USD will account for USD balances as well, not just BTC). Traders had previously achieved 3.5:1 leverage when using BTC as collateral on a long BTC/USD swap. This will harmonize Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term.
As traders may be disappointed by the effective margin reduction, initial leverage will be increased to 3.33:1.
The company will also be doing away with the "leverage" terminology, instead referencing "initial margin" and "maintenance margin", terms more commonly used in the trading industry. And instead of a ratio (x:1), a percentage will be expressed to represent the amount of equity needed relative to total positions. Initial margins are thus 30%, maintenance margins are 15%.
The new structure will simplify its adaptation to new product offerings in the future.
Bitcoin exchange Bitfinex announced that effective Monday, it will be updating and streamlining its margin rules.
Bitfinex is one of the few exchanges allowing traders to trade bitcoins on margin.
They will be scrapping the "choose your leverage" feature, which previously offered a choice of 1:1, 2:1 and 2.5:1. The vast majority of traders chose the maximum value. Instead, a fixed maximum margin will be assigned to each product based on its Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.
The "Tradeable Balance" will now account for all collateral indicated within a given pair (e.g. BTC/USD will account for USD balances as well, not just BTC). Traders had previously achieved 3.5:1 leverage when using BTC as collateral on a long BTC/USD swap. This will harmonize Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term.
As traders may be disappointed by the effective margin reduction, initial leverage will be increased to 3.33:1.
The company will also be doing away with the "leverage" terminology, instead referencing "initial margin" and "maintenance margin", terms more commonly used in the trading industry. And instead of a ratio (x:1), a percentage will be expressed to represent the amount of equity needed relative to total positions. Initial margins are thus 30%, maintenance margins are 15%.
The new structure will simplify its adaptation to new product offerings in the future.