Topic: [ANN] KRAKEN.COM - Exchange with USD EUR GBP JPY CAD BTC LTC XRP NMC XDG STR ETH - page 178. (Read 629033 times)

Really important information, nice course, thanks.

thank you very much!
Just some things I want to clarify:

- The Margin Call Level is 80%, that means if my leverage is 2:1 (and I don't have more balance) the price only has to move 40% (instead of 50%) in the wrong direction to be margin called?
- It is right, that I can choose which currency should be used as collateral? If so:

1) Go long for 5 BTC with 5:1 leverage with EUR as collateral VS 2) Go long for 5 BTC with 5:1 leverage with BTC as collateral.

1)
The price for the 5 BTC is 400€/BTC, so 400€ is locked for this margin position and I don't have more balance in my account.
Now the price goes down 16% (80% from 20%), I will be margin called and loose 80% from my 400€, right?

2)
The price for the 5 BTC is 400€/BTC, so 1BTC is locked for this margin position and I don't have more balance in my account.
Now the price goes down 8% to 368€/BTC. The problem I see now is, that my colleteral is less worth, than it was before. So my assumption is, that I will be margin called long before 16% price movement. Is this right?


edit:
why is the open amount of my margin order, after I tried to settle it, -2.67644522 ? I can`t close it because negative amount.
Ticket number: #98751

Blog post about the "settle position" feature - it's very similar to the email we sent out to clients, but adds some additional explanation to make things clearer.

http://blog.kraken.com/post/143865496412/new-feature-cash-out-of-margin-positions-with

Yeah, the trading guide needs a revision to add more details and examples. Let me offer a quick crash course here that will hopefully answer most of the questions you have.

When placing margin orders everything in the order form works the same as it does for spot trades, because a leveraged margin position is just a spot trade executed through an advance financed by Kraken. For example, a long XBT/EUR position is opened by advancing the trader EUR to buy XBT in a spot trade. And a short XBT/EUR position is opened by advancing the trader XBT to sell for EUR in a spot trade.

So to create a margin order, you enter everything in the order form just as you would for a regular spot trade (the "Amount" field still determines the size of the order, the price parameters for the various order types work the same, etc.) - EXCEPT you select a level of leverage for the order. Selecting a level of leverage means that the order, if executed, will execute a spot trade through an advance financed by Kraken (rather than a spot trade executed directly from the balances in your account).

What about the different levels of leverage? The different levels of leverage just determine how much of your account balance is "tied" to the position as a kind of "collateral" for the advance used to open the position. For example, if you have 10 BTC in your account and open a 5 BTC long @5:1 leverage, then 1 BTC is tied to the position. Since only 1 BTC is tied to the position, you could withdraw up to 9 BTC, but not more, because that last 1 BTC is tied to the position. Similarly, the 9 BTC is available in your account as buying power for opening more positions or making other trades. With 5:1 leverage, you could open positions up to 50 BTC in total volume (but keep in mind that having positions that are much larger than the balance of your account puts you at greater risk of margin call/liquidation, so be very careful about doing this).

Alternatively, if you select 2:1 leverage instead of 5:1 leverage, then 2.5 BTC would be tied to the 5 BTC position. In this case you would only be able to withdraw up to 7.5 BTC and would only have 7.5 BTC buying power left for other trades.

The risk of your margin position to amplified losses or margin call/liquidation is really determined by the size of the position relative to your account balance (and not merely by the level of leverage you select). If you have a 10 BTC balance and open a 5 BTC position, the choice of 5:1 leverage over 2:1 leverage does not really make the position more risky. I think for most traders it's better to just choose the higher level of leverage leaving more buying power in the account, so long as the trader is mindful of not getting to the point where they have positions that are 5x the size of the account balance (but of course for some traders with very high risk tolerance, getting to this 5x level might be OK for their trading style).

Another key point to keep in mind is that not all currencies are "margin currencies" - i.e. currencies that can be "collateralized" for the advance. Currently the only margin currencies on Kraken are BTC, EUR, and USD. So, for example, if you only have ripples (XRP) in your account, you will not be able to margin trade at all.

Hope this helps!


Thanks - it's not that we don't care, just have too many other projects/distractions and this has been neglected. I'll see if we can get it fixed soon though.

@ Dargo, thank you very much for the explanation

Is there a FAQ or Guide which is as detailed as the description in the email for the whole process (with opening the margin position)? The Trading Guide seems to be not very detailed.

Another topic:
If you are at https://www.kraken.com/u/trade (or charts) and scroll down to the bottom. Hover the mouse over the "Trading Guide" link. You will see, that it will redirect you to https://www.kraken.com/redirect?url=  . I already wrote this to support some months ago, but it seems they don't care.
If you are at https://www.kraken.com/help/faq , the link to the Trading Guide is correct.

Glad you like it!


Position settlement is essentially an alternative way of closing a margin position, so you have to open a margin position before you can settle it. You can't define a price because the price of the settle order is determined by the average fill price of the order used to open the position.


Normally when a leveraged margin position is closed it is done by executing an opposing order on the open market (a sell order to close a long position or a buy order to close a short position). The opposing order serves to return the funds which are advanced to the trader to open the position. However, the same result can be achieved by returning the advanced funds directly from the trader's account balance with no trade executed on the open market - this is position settlement. Keep in mind that the entire process is not free end-to-end. You pay a trade fee to open margin positions and a margin fee to maintain them. The only free part is closing the position via settlement (closing the normal way by executing an opposing order also involves a trade fee).


In this case the trader would open a long position and is being advanced the EUR to do this. The advance is effectively collateralized by the bitcoin balance in the account. Then after the EUR deposit arrives a settle position order can be used to return the EUR that were advanced in return for the bitcoin the EUR were used to buy. But until the margin position is settled, it is subject to the same risk of margin call or even forced liquidation as any other margin position if the market moves quickly against the position. But the risk of margin call or liquidation depends on the size of the position relative to the value of the bitcoins in the account. You are pretty safe, for example, if you have 25 bitcoins in your account and open a long position for 10 bitcoins for a day or two until your funds arrive.

Since EUR deposits are available to you, that is definitely your best option (our EUR payments are much faster and easier compared to USD). If you don't see USD bank details or instructions for making a deposit, it probably means that USD deposits aren't available to you.

Glad to hear you got the money back - I'm not sure why you want to do a new tier 4 verification, but please contact us through support on this.

Settle Position

Thank you very much this this fantastic feature!

I have some questions:
1) I tried to place one settle position, buy 0.05 BTC with 1.5 Leverage. But I can't define a price, why? And when I try to place it, it says "invalid position". Do I have to open a margin position first?

2) In your information email you say, that a settle position would be free of charge, because there would be no market action. But why is there no market action? If I place a settle position buy order for 1 BTC at 400€/BTC you have to buy this 1 BTC at that price, otherwise it would not be possible for you to give me that 1 bTC at 400€/BTC after I close the position.  Or do I understand it wrong?

3) Also in your email you give the example, that if someone has only bitcoins in his account and want to buy some more bitcoins, he can make a settle position. That would mean the previous btc in the account would be the colateral? So if the price was 400€/BTC before and the leverage of 2 was used, and then the prcie goes down to 300€/BTC that would mean that also the colateral lost value, which will result in a faster margin call, right?

Thank you for service. But the biggest problem its very slow support responce. For 1 request we can wait more than week.

Problem was solved. Thanks.

Hi - I'm very sorry about the delay with this. We received a SWIFT message from your bank requesting the return of the deposit and it was sent back from our end last week. You should have received it by now and I'm not sure why you haven't. We will ask our bank to reply to the SWIFT message to confirm receipt of the funds and that should help to get things straightened out. Also, I will DM you just to confirm that we're talking about the same deposit.

Thank you, problem was solved

Thanks problem was solved

Yes, please DM me your support request number and I will look into this for you.

of course kraken is not scam.
PM Dargo your ticket number and I'm sure he will speed up the support.

Thank you! Problem was solved

Hello
My account ID:AA66 N84G VJJE J6CY.This is first time use Kraken service.
Please verify for my Tier 4.Money hold on your system is not fair for business.

That is the No 1 rule in the security implementation to prevent hacking (Phishing - link manipulation) by many companies that have security policies enacted.