Margin trading on the Crypto.com Exchange allows you to borrow Virtual Assets on Crypto.com Exchange to trade on the Spot market. Eligible users can use the margin loan as leverage (borrowed Virtual Assets) to open a position that is larger than the balance of your Account. On the Crypto.com Exchange, traders are required to transfer Virtual Assets as Collateral first into their Margin Wallet.

When borrowing Virtual Assets, you can borrow:

  • in the same type of Virtual Assets as your Collateral (for example, your Collateral may be BTC and you may borrow BTC); and
  • in a different type of Virtual Asset than your Collateral (for example, your Collateral is BTC and you borrow USDT).

Currently, the only supported trading pair is BTC/USDT.

Leverage is a very powerful tool because it can amplify your gains, but it is also dangerous because it can amplify your losses to the point where your Virtual Assets can be permanently lost and you could still have a liability to us.

Examples of gains/losses:

  • If, for example the margin is 0.1 BTC but the value of the trading on the basis of that margin is 1 BTC, a 5% move in the market (in either direction) is translated into a 0.05 BTC gain or loss (50% of the value of the margin).

Common Terms on Crypto.com Exchange

Term

Description

Margin Wallet

One or more wallet accounts designated to hold the Collateral and from which Margin Trading activity occurs. The Margin Wallet is separate from your Spot Wallet used for ordinary spot trading.

Spot Wallet

This is your primary wallet under your Account. You cannot conduct margin trading activities from this wallet.

Margin

Borrowed Virtual Assets to trade on the Exchange (i.e. if you transfer 1 BTC in your Margin Wallet and borrow 2 BTC, your leverage ratio is 3x).

Leverage

Leverage is the amount of Virtual Assets that a trader can use to multiply their position (i.e. 3x leverage is to multiply your position by 3x).

Collateral

The amount of immediately available Virtual Assets maintained, or required to be maintained into the Margin Wallet for margin trading.

Interest

The cost of borrowing Virtual Assets.

Position

Traders can hold two positions:

  1. A long position is using your Virtual Assets to purchase more in the expectation that the value will rise
  2. A short position is using your Virtual Assets to sell in the expectation that the value will drop

Margin Score

Margin Score = Total Margin Wallet balance ÷ (total borrowed + total outstanding interest)

Margin Score is a way to monitor the health and risk of your Margin Wallet as against the Amount Owing. If a Margin Score dips below the prescribed threshold, a Margin Call will be made. If the Margin Score falls before a separate prescribed threshold, we may undertake a Forced Liquidation.

See “Margin Score and Margin Call” for further details on calculating the Margin Score and the prescribed thresholds.

Margin Call

When your Margin Score drops below the prescribed thresholds set by us, a Margin Call will be triggered via email to your Account’s registered email address. The email will notify you to add more Collateral to your Margin Wallet or to repay outstanding loans.

Margin Trading Term Limit

The maximum amount of time we are prepared to provide you with credit under the loan.

See “Margin Trading Term Limit” for further details.

Forced Liquidation

Action we may take to bring the Margin Wallet back to a healthy Margin Score. This may include forced selling of an open position and/or your Collateral.

See the Addendum for further details regarding Forced Liquidation.

Maximum Borrowing Limit

The maximum possible amount that Crypto.com could make available under a Margin Trading Facility. This maximum amount is a general ceiling and is not specific to any person. This is distinguished from the specific Margin Credit Limit that Crypto.com may make available to a specific user by reference to the amount of Collateral that user has provided and other factors (and accordingly will be different for each user). This may be lower than the Maximum Borrowing Limit.

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