Coinbase Pro recently announced that due to popular demand it now provides margin trading to its eligible customers. As noted in the press release, margin trading has been a requested feature for some time now and the people at Coinbase Pro believe that they are finally delivering an intuitive UX that has all the necessary functions.
Through crypto trading on margin, customers are able to acquire and use additional funds, which increases the effectiveness of their trade actions. When deployed as a piece of an efficient trading strategy, margin trading does not only boost the position of customers in a concrete trade but assists in portfolio diversification. With the help of margin trading, users can avoid arbitrage in between different positions without the need for deposing extra capital.
In the course of the following year, Coinbase Pro intends to grow and make its platform available to clients from more regions around the world. Another aim is to widen the product offering with a bigger variety of collateral assets.
In essence, margin trading is created for advanced traders and grants them access to some of the most reliable collection of crypto liquidity. In fact, other exchanges lack Coinbase’s security, liquidity, record of compliance and reliability levels and this is how the San Francisco-based exchange wants to make customers confident in their complex trading strategies.
As a follow up, we should mention that margin trading is not for everybody as a client may lose even more money than the original investment. In the press release, Coinbase notes that previous asset performance does not guarantee any kind of future performance and clients should not use it as an indicator.
Who is eligible and what are the collateral requirements?
Coinbase Pro posted different requirements for individual and institutional traders, as follows:
Individual traders must have an active Coinbase Pro account, whose activity will be evaluated by the user’s recent trades and balances, withdrawal, and deposit movement. In order to become eligible, Coinbase Pro advises users to trade regularly, keep a balance and have enough collateral assets in their accounts.
There is a localization requirement as the feature is available in 23 states in the U.S. and all individual traders must live in one of them. The states where margin trading is currently available are FL, TX, IL, NJ, VA, GA, AR, AK, OR, CT, NH, MA, NE, NC, OK, CO, KS, ME, SC, UT, WI, WY, and WV.
When it comes to institutional clients who want to use margin trading the localization requirement is to be based in one of the 43 U.S. states and 9 countries over the globe that offer margin for institutions.