23 Mar 2022
4 min read
Let your collateral do more for you
In order to be a leading exchange, we need to have market-leading products with deep liquidity and a cutting-edge trading system that provides traders flexibility and ease of use. We will be taking a significant step towards this by introducing an innovative feature named Unified Margin.
Unified Margin (UM) is an upgraded trading and risk management system that allows you to use different assets as collateral for trading perpetuals on the derivatives exchange. The aim is to allow you to trade derivatives regardless of which coins you hold, eliminating the need to swap assets for stablecoins to trade linear perpetuals, and to offer you bonuses and incentives for using certain coins as collateral.
Usually, crypto exchanges use stablecoins such as USDT as a quote asset against many cryptocurrencies for linear products. However, if you hold cryptocurrencies such as BTC you may be less inclined to sell and convert them to stablecoins in order to trade linear perpetuals as the opportunity cost may be high. Unified Margin allows you to collateralize your non-stablecoin crypto-assets to participate in the futures market. You can trade futures contracts without the need to convert your crypto assets into USDT, and this opens up many multi-layered trading and investment strategies. For example, since you can use BTC to trade margin products such as perpetuals rather than having to convert into stablecoins, you maintain your long-term exposure to BTC while executing short-term trading strategies.
As part of the switch to UM we are retiring our current inverse and quanto perpetuals and replacing them with linear perpetuals. These are much easier to understand and trade than inverse and quanto perpetuals. Market makers much prefer linear perpetuals, leading to them quoting higher liquidity and tighter spreads, which means friendlier markets for trading and eventually bigger volumes!
Very simply you put up your coins as collateral, and we lend you USD to trade with. When you are done, you can withdraw your coins, and then take your trading profit as USDT. For example, if you put up 1,000 USDT, we would give you 1,000 USD to trade with. If you put in 1 BTC, and the current market price is 35,000 USD, we would give you 35,000 USD to trade with. The amount that you have available to trade is adjusted as the market value of your collateral changes. For example, if 1 BTC goes from 35,000 USD to 40,000 USD, you would now have 40,000 USD to trade with.
For more information see the Unified Margin Support Page.
When unified margin launches, GDT will be one of the coins you can use as collateral, and we will be offering a 20% bonus on this coin! For example, if you move 10000 GDT to your derivatives account and the market price of GDT is $0.20, you will have $2,400 to trade with rather than just $2,000.
Each old inverse/quanto product's market will be closed and replaced with a new equivalent linear perpetual.
As part of the switchover, we are closing any open positions in our existing products. What that means is that we will close your positions at the current index price when we do the transition. We strongly recommend that you close your positions yourself ahead of this, but if you don't, they will be closed automatically.
The Bitcoin you currently have in your derivatives account will become collateral during the switchover. You will be able to withdraw this or trade immediately - you will not lose any assets as part of the switchover.
Derivatives trading with Unified Margin on Globe will commence at 17:00 GMT on Monday 28th March 2022.
We've recently moved our exchange servers to Tokyo. While this sounds like a boring technical task with no relevance, it makes a huge difference to traders using the exchange for a number of reasons, is a key part of our commitment to offer excellent liquidity and world leading performance for all our customers. To find out why, we'll delve into the dark depths of algorithmic trading and market making.
14 Mar 2022
2 min read