Japanese crypto trading platform Liquid has introduced isolated margin trading to “redefine and improve” trading services.
The company thinks that the new services will enhance the trading experience of leverage traders in the volatile cryptocurrency market.
“Due to the volatility of cryptocurrency markets, highly leveraged positions can rapidly change. For speculative positions, isolated margin mode may be a safer bet,” Liquid noted in an announcement.
Cross-margin to isolated margin
To date, the Quoine subsidiary only offered cross-margin trading to its clients in which the margin is shared between two open positions and is entirely backed by the client’s wallet balance.
Explaining cross-margin trading, Liquid stated: “This margin method reduces the risk of liquidation. Any Realised P&L from other closed positions using the same funding currency can aid in adding margin on an opened losing position.”
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“This margin method is useful for users who are hedging existing positions, and also for arbitragers that do not wish to be exposed on one side of the trade in the event of a liquidation.”
Isolated margin, on the other hand, is placed into a single position, and is isolated from other positions in funding currency account balance.
“The maximum amount you would lose from liquidation is the margin you placed on the position, thus allowing you to manage each individual position’s risk better, compared to using the cross-margin method. When using isolated margin, you are able to adjust the amount of margin for each position,” the platform explained.
Liquid will now offer both options to provide traders the option of choosing the right margin on a trade-by-trade basis.
The Japanese crypto startup is one of the few companies in the sector to earn a “Unicorn” status with over a billion in valuation. Meanwhile, after dominating the Japanese market, the company is eying to enter the lucrative US market and inked a deal with Virtual Currency Partners (VCP) last month to establish a joint venture.