Hey everyone.. I'm new to bitcoin trading. I have a lot to learn before I actively start trading. So in the meantime, I wanted to use BitFinex to make some minimal gains via interest while I learn the ropes. I just spent the last few days getting my accoutn verified but still waiting on some money I deposited to clear.
Looks like the current return rates for swap lending is around 0.12-0.13%... I will test this out with about $100 to see what the whole deal is. But if it works out, I'm looking to deposit around $125,000
My question is, does all your money in your account get used up for lending immediately? Or does the system only use part of your money depending on the demand? Still trying to wrap my head around the whole process.
Thanks for any insight.
Cheers.
-senor
Welcome.
You have complete control over how much you lend.. You can offer all you have, or nothing at all. If you want to lend, transfer the USD to your deposit wallet ("manage wallets" button), then go to the lending tab (called "total return swaps") and there you can enter your offers in USD, BTC or LTC (choose one of the currencies at the top and then click on the "offer swap" tab below.
As was already mentioned
http://charts-bfxdata.rhcloud.com/bitfinexLiquidityUSD.php is very useful. It helps to decide at which % to place your offer. For example, if the first chart shows a pattern like in right side of this screenshot, you could offer at 0.10% and be the lowest offer (and get taken quickly), but you'd shoot yourself in the foot. Instead it would be better to offer at 0.2%-0.22%. It may take an hour longer before your offer is taken, but your profit will be higher.
The third chart is also important for maximizing your profit. The example below is from today. There's a big offer "wall" at 0.14% here (that's all the lenders who choose the flash return rate). If a trader wants to borrow a large amount, say more than 300K, they'll have to pay at least 0.14%, so setting your offer at 0.12% here would not make much sense.
If you have time to monitor and adjust your offers regularly (once or twice a day), it would be nice if you didn't put it in flash return rate (the "set it and forget it" option for interest rate, the average of all active swaps)). The FRR unfortunately has the effect of dragging the interest rate down because there are always people who undercut it and if the amount in the FRR is huge (like today) there's no reason for traders to pay more than the FRR. So the more people use FRR, the lower the interest rates get.