Leveraged Trading Beta

Leveraged trading allows you to borrow certain tokens to engage in leveraged trading on Bittrex Global. If you are not already enabled for leveraged trading, please inquire on our Telegram page here: https://t.me/BittrexLVTBeta. In order to use leverage, you must first deposit collateral (e.g., BTC) from your trading account into your leveraged account. The collateral in your leveraged account, as well as any assets in your trading account, are used to secure the loans you use to trade. The additional funds borrowed by a trader can be utilized to open larger trading positions than they otherwise could without leverage. Currently, Bittrex Global allows users to borrow 3 times (3x) the collateral deposited to leverage increased position sizes. Leveraged trading enables traders to use less of their own capital to open larger trading positions, amplifying their gains and losses.

 

Leveraged Trading Features

  • 3x Leverage*  
  • Collateral in BTC
  • BTC-ETH, BTC-XRP and BTC-BCH Markets
  • Direct Market Hedging - Open short and long positions in the same market to limit market exposure
  • Positions Opened and Closed Separately - Positions cannot be flipped or settled
  • Increased Borrow Limits - Determined by market liquidity when opening a position

*Subject to change in Bittrex Global's sole discretion.

Risks Associated with Leveraged Trading

Leveraged trading in a volatile market such as cryptocurrency has associated risks. Increased profits and losses may occur while using leveraged trading. Please read and understand the Bittrex Global Terms of Service as well as the Bittrex Global Leveraged Trading Disclosure Statement seen in the links below prior to opening a position:

Funding Your Leveraged Account

Before you trade with leverage, you must fund your leveraged account. Collateral (e.g., BTC) must be transferred from your trading account into your leveraged account before opening positions. Keep in mind that funds and/or assets which are in your leveraged account are unavailable to withdraw until transferred back to your trading account.

Transfers to Leveraged Account

Step #1: After logging into your account, click on “Holdings” located at the top right of the login page 

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Step #2: Once on the "Holdings" page, click on “Trading Account.” Make sure there is an available balance in your BTC wallet. You must have an "Available Balance" of over zero BTC in your trading account prior to funding your leveraged account.

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Step #3: Transfer funds from your trading account to your leveraged account by clicking on "Transfer Funds" in the top right corner.

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Step #4: The following transfer screen will appear. Ensure funds are being transferred from the TRADING ACCOUNT -> LEVERAGED ACCOUNT as seen in the red rectangle below; not from the LEVERAGED ACCOUNT-> TRADING ACCOUNT. Once confirmed, click and drag the blue circle or type in the amount preferred to be transferred to your leveraged account. To finalize the transfer, click “Transfer.”

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Step #5: Once the funds have been successfully transferred, the following confirmation will be displayed.

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Where Are The Transferred Funds Displayed?

Available funds will display in three different locations. 

1.) Leveraged Account Balance Summary

The collateral transferred will display as “Collateral” under the "Leveraged Account Balance" display bar to the right of the orders and holdings tab.

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2.) Holdings

The transferred collateral will also display under the "Leveraged Account" on the "Holdings" page.

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3.) Market Order Form

The buying power will display the added collateral at 3x leverage on the markets page under “Leveraged Account”. In this example, 1 BTC was transferred into the leveraged account. Because this market offers 3x leverage, 3 BTC of “Buying Power” is available to trade. Buying Power will be reduced when positions are opened.

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Transferring to Trading Account

Transferring funds from your leveraged account to your trading account is restricted by the user's current margin level. The margin level does not allow funds to be transferred from leveraged accounts below a current margin level of 100%. You will need to close any open positions to increase your margin level if it is below 100% to enable the transfer of funds back to your trading account.

Step #1: After logging into your account, click on “Holdings” located at the top right of the login page.

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Step #2: The "Holdings" page will appear. Click on “Leveraged Account.”

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Step #3: Transfer funds from leveraged account to trading account by clicking on "Transfer Funds" in the top right corner.

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Step #4: The following transfer screen will appear. Ensure funds are being transferred from the LEVERAGED ACCOUNT-> TRADING ACCOUNT as seen in the red rectangle below. Once confirmed, click and drag the blue circle to change the amount transferred to the trading account. To finalize the transfer, click “Transfer.”

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Step #5: Once the funds have been successfully transferred, the following confirmation will be displayed.

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Opening Positions

To trade with leverage, you must open positions in your leveraged account. Positions can either be long or short. Traders generally use long positions when they are betting the price of an asset will increase in the future. Traders generally use short positions when they are bettering that the price of an asset will decrease in the future. When opening any position, a loan is taken out to fund the position and then an order is placed using the loaned funds.

Position Order Types

When a position is opened, a buy or sell order is executed to acquire the assets held in the position. Currently, positions can only be opened using Limit Orders with Fill-or-Kill (FOK) time-in-force. When positions are closed, they are closed as Market Orders with Fill-or-Kill (FOK) time-in-force.

A Limit Order allows the user to set the maximum (or minimum) price they are willing to buy (or sell) the asset for.

Market Order is a buy or sell order to be executed immediately at the current market prices.

A Fill-Or-Kill (FOK) order type is a time-in-force duration where an order must be filled immediately and completely or be cancelled (killed). Fill-or-kill orders match to existing orders on an order book. Since liquidity is taken from the order book with fill-or-kill orders, all fill-or-kill orders are considered “Taker Orders.” When entering a leveraged position, all orders are fill-or-kill limit orders. When closing a leveraged position, all orders are fill-or-kill market orders. 

Position Leverage and Buying Power

Leverage refers to the degree to which you can multiply the return on your investment with leveraged trading. All positions have 3x leverage. When opening a position, 1/3 of the amount borrowed funds will be tied 1:1 by collateral in your leveraged account. In other words, for every 1 BTC in collateral transferred to a leveraged account, 3 BTC can be borrowed when opening a leveraged position. When trading, the current amount of leveraged trading is displayed as Buying Power on the order form.

Long Positions

When you open a long position, you are borrowing funds to buy that asset, hoping the price will go up prior to selling. Profit is made when the price goes up prior to selling the asset.

Example: Opening a 2 ETH Long Position

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Prior to opening a long position for ETH in the BTC-ETH market, identify the preferred limit price. Make sure enough liquidity is at or below the limit price so that a fill-or-kill limit order can execute. In this example the limit price is at .056 BTC. In order for the position to be opened, 2 ETH have to be on the order book for an ASK (BTC) price at or below .056 BTC. As seen in the example above, enough liquidity is at or below the limit price to open the position. The long position will be filled at the best possible price below the limit price once executed.

Short Positions

When you open a short position, you are borrowing an asset to sell with the hope to buy the asset back at a lower price in the future. Profit is made when the price of the asset goes down prior to buying the asset back at a lower price. 

Example: Opening a 2 ETH Short Position

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Prior to opening a short position for ETH in the BTC-ETH market, identify the preferred limit price. Make sure enough liquidity is at or above the limit price so that a FOK-Limit Order can execute . In this example the limit price is at .045 BTC. In order for the position to be opened, 2 ETH have to be on the order book for a Bid (BTC) Price at or above .045 BTC. As seen in the example above, enough liquidity is at or above the limit price to open the position. The position will be filled at the best possible price above the limit price.

Errors when Opening Positions

When you're opening a position, you may encounter one of the following errors if your order cannot be executed.

Liquidity Errors

If there is not enough liquidity (sum of size) at your specified price the following error will be displayed.

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If the above error is displayed you will need to adjust the limit price. For a long position, you'll need to increase the limit price. For a short position, you'll need to decrease the limit price.

No Loans Available Error

The following error below means there are no loans available in either a market or on a specific side of the order book (Bid/Ask). Please wait until more loans are available prior to opening a leveraged position:

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Users will always be able to execute trades in their trading accounts, just not in their leveraged account if no loans are available. 

Conditions: Take Profit and Stop Loss

There are two conditions that can be added before or after opening a position. Conditions can also be changed once a position is opened. The two conditions that can be added are:

  • Take Profit- A specified price where a position is closed when the price goes above for a long position or below for a short position. Take Profit helps lock in profits.
  • Stop Loss- A specified price where a position is closed when the price goes below for a long position or above for a short position. Stop Loss helps limit a loss. 

All conditions will trigger a fill-or-kill market order when closing a position.

Adding Conditions Prior To Opening Positions

Step #1: Depending on if a user’s preference, conditions can be added separately or together when a position is opened. To add a condition to a long/short position, click the box for one or both of the conditions.

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Step #2: Once clicked, input fields will be displayed to add a condition as seen below. Please input a preferred BTC price above the entry price for a long take profit condition and/or a BTC price below the entry price for long stop loss condition. If a short position is being opened, a take profit condition is below the "Bid Price" when a Stop Loss Condition must be placed above the "Bid price."

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In this example, the take profit price would have to be above a .00003118 BTC Price. The stop loss would have to be below .00003118 BTC. 

The follow error will be displayed if a take profit or stop loss price is entered incorrectly:

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Adding Conditions After Opening Positions

Step #1: Similar to closing an order, a condition can be changed in two locations, the markets page or the orders page. To add, cancel or change a condition price, click on the blue condition field. The field will either have a specified condition that has previously been added or show “+ Add Conditions.”

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Step #2: Change or input a new condition by clicking on the condition and changing to the specified Take Profit and/or Stop Loss. An input drop down field will only appear if a box is clicked, which is shown by a check mark next to Take Profit/Stop Loss.

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Step #3: Once the specified condition price is inputted, click update. The open position will be updated to the newly specified change to a condition

Depending the change, the condition(s) on an open position will be displayed one of four ways under "Open Positions"

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  • TP = Take Profit
  • SL = Stop Loss
  • + Add Condition = No Current Conditions Set on the Position)
Margin Level and Liquidation

As market conditions change, the value of your positions will change. In order to ensure that the lender can be repaid, we monitor your "Margin Level" and may force the close of your positions should the value of your positions put your ability to repay your outstanding loans at risk.

Margin Levels

Margin level is the relationship between a user's equity compared to used margin. 

(Value of collateral + Total unrealized P&L - Interest Accrued) / (Total Loan Principal / Leverage)

It is recommended that users keep margin level above 100% to avoid liquidation. Margin level can be increased by either closing positions or adding additional collateral to a leveraged account. 

Margin level is displayed on the right side of the "Orders" and "Holdings" page as seen below:

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Margin Maintenance Requirement Level (+100%) 

Ideal margin level where all leveraged trading capabilities are enabled. 

  • Positions cannot be opened if margin level is less than 100%.
  • Funds cannot be transferred from the leveraged account to the trading account below 100% margin level. If margin level is below 100%, positions will need to be closed prior to transferring.
  • Margin Level is returned above the margin maintenance requirement level upon liquidation.

Margin Call Level (80%)

If margin level falls below 80% in a leveraged account, users are sent an e-mail warning that either additional collateral has to be transferred or opened positions need to be closed in order to raise the margin level back to a margin maintenance requirement level. Users should always try to keep margin level above 100%.

  • Users in margin call will be notified via e-mail once margin level is below 80%.
  • The e-mail will notify the user to deposit more collateral or close opened positions to bring margin level above the margin maintenance requirement level.
  • Positions can be closed and/or liquidated as specified in the terms of service once in margin call     < 80%. Best practice is to always keep margin level above the margin maintenance requirement level or higher to keep positions from being closed or liquidated.

Liquidation Level (40%)

The automated closing of (some or all) opened positions due to the loss of initial collateral. Once margin level falls below 40%, partial or total liquidation will occur in order to bring accounts to the margin maintenance requirement level.

  • Users will be notified once a position is in liquidation via e-mail.
  • No position can be opened, traded or withdrawn during liquidation.
  • Positions are liquidated in the order of when a position was opened, starting with the position that has been opened the longest.
  • Positions are liquidated until margin level is returned to the margin maintenance requirement level > 100%.
  • Liquidation is automated and cannot be stopped until an account is brought above the margin maintenance requirement level.
Closing Positions

Positions can be closed from the Market page where it was opened or from the Orders > Leveraged Trading page.

Closing a Position from the Market Page

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Follow the steps below:

Step #1. Navigate to the market (e.g. BTC-ETH) where there are currently long positions.

Example: If a long ETH position was opened in the BTC-ETH market. In order to close the position, the BTC-ETH market needs to be accessed. You cannot close a long ETH position by accessing the BTC-ETH market because positions in other markets will not appear.

Step #2. Click “Open Positions” under the order book. Once clicked, all open positions in this market will appear below.

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Step #3. In order to close a position, click the red “x” to the right of the open positions.

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Step #4. The following pop-up will appear showing the "Quantity" and "Price". Be advised all manually closed positions are fill-or-kill market orders. Commission and interest accrued will be reflected in the realized P/L when the order is closed. Unrealized P/L includes interest accrued but not commission fees prior to closing a position.

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Step #5. To close the position, click “Close Short Position,” if a short position was opened the closing will read “Close Long Position."

Step #6. All closed positions in this market will show under “Position History.”

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Closing a Position from the Orders Page

The orders page shows all current "Open Positions" in the leveraged account.

Follow the steps below:

Step #1. Click the “Orders” tab in the top left of the home screen.

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Step #2. The orders screen will appear. Click “Leveraged Account” next to “Trading Account.”

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Step #3. All open positions in leveraged enabled markets will appear.

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Step #4. To close an open position, click the “red x” to the right of the open position you'd like to be closed.

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Step #5. The following pop-up will appear showing the "Quantity" and "Price." Be advised all manually closed positions are fill-or-kill market orders. Commission and interest accrued will be reflected in the realized P/L when the order is closed. Unrealized P/L includes interest accrued but not commission fees prior to closing a position.

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As seen in the "Positions History," closed orders will include the following details:

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  • Closed Date
  • Opened Date
  • Market/Limit Order
  • Side - Long or Short
  • Entry Price
  • Exit Price
  • Quantity
  • Realized P/L (BTC) - Actual profit or loss from the closed position
  • P/L % - % of profit or loss from the closed position
  • Interest Paid (BTC) -Interest accrued over the course of the opened position until closed
Leveraged Trading Fees: Commission and Interest

Trading Fees (Commission)

Trading fees, also known as commission fees, are charged on the buy and sell orders which open and close positions. These fees are the same as the fees for all orders based on a user's fee schedule. For more details, see this article.

Loan Interest

All markets enabled for leveraged trading have variable annual interest rates that accrue daily once a position is open. Interest accrues every 24 hours. The first day of interest accrues upon opening a position. Interest rates are fixed until a position is closed.

The maximum interest rate of a position will be displayed to the user prior to opening the position, and the actual rate will be calculated and shown on a position once it has been opened.

Where Is Interest Displayed?

Offered interest rates will display once a quantity has been entered on an order form. Depending the quantity, the interest rate will change. Positions will be opened at or below the offered interest rate. (Example: 1 ETH position is offered at a 11% annual interest but once opened the interest could be lower which will be seen.)

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To see accrued interest on open positions, click on orders then leveraged account to see all open positions. 

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Once the icon in the red box above is clicked, drop down information will display that includes the "Interest Accrued" and "Average Interest Rate" as seen below:

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Accrued Interest is calculated in the collateral currency (BTC) and is included in the unrealized P/L. 

Accrued Interest Calculation

Accrued Interest can be calculated as:

(Loan Principal x (Annual Interest Rate/ 365)) x Number of 24 hour periods a position is open

  • Loan Principal= Total entry price of an open position (Quantity x Actual Rate)
  • Annual Interest Rate= Simple Interest Paid over 1 year
  • 365= Number of days to calculate a year
  • Number of 24-hour periods a position has been opened

Example:

A long position of 27000 XRP was opened for 1 BTC with a 10% annual interest rate.

1 x ((.10/365) * 1= .000027397 BTC per day in interest

In this example, .000027397 BTC will accrue every 24 hours starting once the positions is opened. If the position remains open for 72 hours, the user would pay (.000027397 BTC x 4= .00109589 BTC.)  The following shows how daily interest will accrue over a 72 hour period in the example above:

Opening a position= .000027397 BTC

24 hours after opening= .000054794 BTC

48 hours after opening= .000082191 BTC

72 hours after opening= .000109588 BTC

Loan Terms

Loans for open positions have a maximum loan age of 28 days. All positions will be closed with a fill-or-kill market order after 28 days if the position is not closed prior to the loan expiring. 

Leveraged Trading Definitions

Leveraged Trading - The use of collateral to borrow additional funds in order to trade with leverage.

Margin - Assets deposited to a lender that protect the default risk of borrowed funds. The documentation will use “collateral,” when referring to “margin.”

Collateral - The assets (e.g. BTC) deposited by the borrower into a leveraged account from a trading account. The lender (Bittrex Global) uses collateral as security in case a borrower defaults on a loan if liquidation occurs.

Leverage - Borrowing an asset to increase a return on an investment. 3x leverage is the default leverage when Leveraged Trading. 1/3 of the amount borrowed funds will be tied 1:1 by collateral when a position is opened.

Buying Power - The total amount available to open positions in a leveraged account. Buying Power is 3x collateral prior to having open positions.

Margin Net Value - (Collateral + (unrealized P/L-interest accrued)) Since profit and loss is not realized on paper until a position is closed, the net value calculates the equity of leveraged accounts if all positions were to be closed.

Used Margin - Sum of collateral used for all open positions.

Free Margin - The total amount of collateral remaining to open new positions.

Maximum Loan Age - The maximum age for any collateralized loan in leveraged trading is 28 days. All positions will be closed with a fill-or-kill market order after 28 days if the position is not closed prior to the loan expiring. Interest is charged every 24 hours on open positions.

Market Price - Last traded price in a market.

Market Order - A buy or sell order that executes immediately at current market price.

Limit Order - An order to buy or sell an asset at a specific price or better.

Buying Power - The total amount of funds available to open positions in a leveraged account based upon a specific market's maximum allowed leverage. 

Initial Margin - Amount of collateral tied to each position.

Position - The combination or a loan and a set of trades leveraging the loaned asset.

Long Position - Buying an asset, hoping the price will go up prior to selling.

Short Position - Selling an asset in order to buy the asset back at a lower price.

Net Positions - Net portfolio of open positions when comparing net long vs net short. A portfolio is net long if the present value of all long positions is greater than that of the open short positions. A portfolio is net short if the net value of short positions is greater than that of the open long positions. (See net positions by clicking “Leveraged Account” under “Holdings”)

Open Position - Create a position by taking a loan and executing a trade with the loaned funds. Opening a long position involves taking a loan and using the funds to purchase an asset on the market. Opening a short position involves taking a loan and selling the loaned asset on the market.

Close Position - Execute a trade that is the opposite side of the trade that opened the position. Closing a short position means the asset was bought back. Closing a long position means the asset was sold. In all cases, the proceeds from the closing trade is used to repay the position's loan.

Direct Hedging - Opening a long and short position in the same market to offset risks. Hedging is used to protect from losses not to increase profits.

Unrealized P/L - All open positions have unrealized P/L until closed. Upon closing a position, profit/loss is realized and reflected in the collateral amount.

Margin level - Relationship between a user's equity compared to used margin. (Value of collateral + (Total unrealized P&L-interest accrued)) / (Total Loan Principal / Leverage)

Margin Call level - 80%

Margin Call - If a margin level falls below 80% in a leveraged account, users are sent an e-mail warning that either additional collateral has to be transferred or opened positions need to be closed to raise the margin level back to a margin maintenance requirement level.

Liquidation Level - 40%

Liquidation – The automated closing of (all or some) opened positions due to the loss of initial collateral Once margin level falls below 40%, partial or total liquidation will occur in order to bring  accounts to the margin maintenance requirement level.

Margin Maintenance Requirement Level  100% margin level or above, which is the ideal margin level users accounts are returned to during liquidation in order to have full functionality for leveraged trading.

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