New collateral currency for margin and futures trading: USDG!

What is collateral currency?

Collateral currencies can be fiat currencies, cryptocurrencies, or stablecoins that can be used for margin trading. Unlike standard spot trading, margin trading allows you to borrow funds directly from Kraken to open long or short positions.

When trading on margin, Kraken’s margin pool is used to buy or sell cryptocurrencies, and collateral secures margin extensions. The collateral currency you use does not have to match the trading pairs in your order book to trade, giving you more flexibility to go long or short on margin-enabled trading pairs.

Note: Both unstaken assets and Kraken Rewards assets can be used as margin collateral. However, assets held in Kraken Pro’s on-chain staking cannot be used as margin collateral.

Maximize the benefits of margin trading

Expanding the range of collateral currenciess Traders can do this in several ways:

Tax incentives

In some jurisdictions, you may be able to defer tax liability by using digital assets as collateral rather than selling them outright. By leveraging collateral currencies for margin trading, traders may be able to reduce their immediate tax liability while maintaining the exposure of their holdings.

Diversification of collateral

By using multiple collateral currencies, you can better manage risk and reduce the impact of volatility in a single asset. This is especially valuable for traders who want to protect their positions in unpredictable markets.

Improving liquidity

Having more assets eligible as collateral allows you to maintain a solid position on margin while freeing up funds for other trading opportunities. This allows your portfolio to stay active and respond to market changes.

strategic flexibility

The ability to combine assets with different haircuts allows for fine-tuned margin strategies tailored to your risk tolerance and market outlook. Whether you prefer conservative or aggressive trading, expanded collateral options provide the flexibility you need.

Hedging and short selling opportunities

Margin trading and access to a variety of collateral currencies allow traders to hedge existing positions or take advantage of market declines through short selling. This opens up opportunities to profit regardless of the direction of the market.

Leverage and capital efficiency

Margin trading amplifies your purchasing power and allows you to take positions larger than your available capital. This capital efficiency is further enhanced by the ability to use a wider range of collateral currencies, allowing you to optimize resource allocation while maximizing potential returns.

Please trade with caution

There is no guarantee that limit orders will be executed. There is no guarantee that the margin pool will always be available. There is also no guarantee that a market order will be executed at a particular price. The availability and liquidity of a particular digital asset will affect these types of orders.

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