We’re committed to providing traders with greater flexibility and control, and are excited to announce a significant expansion in our collateral opportunities for Kraken Pro traders.
Margin trading is now available for a new trading pair:
Start margin trading on Kraken Pro
What is a collateral currency?
A collateral currency can be fiat, crypto or stablecoin you can use for trading on margin. Unlike standard spot trading, margin trading allows you to open long or short positions by borrowing funds directly from Kraken.
When you trade on margin, Kraken’s margin pool is used for the purchase or sale of the cryptocurrency, while your collateral secures the extensions of margin. The collateral currency you use does not need to match the trading pair of the order book you’re trading on, allowing for greater flexibility to go long or short in any margin enabled trading pair.
Note: Both unstaked and Kraken Rewards assets can be used as margin collateral. However, assets held in Kraken Pro on-chain staking are ineligible to use as margin collateral.
Maximizing the benefits of margin trading
Expanding the range of collateral currencies may empowers traders in several ways:
Tax advantages
In some jurisdictions, using digital assets as collateral rather than selling them outright can defer taxable events. By leveraging collateral currencies for margin trading, traders can potentially reduce immediate tax liabilities while maintaining exposure to their holdings.
Diversification of collateral
By using multiple collateral currencies, you can better manage risk and reduce exposure to volatility in any single asset. This is particularly valuable for traders seeking to safeguard their positions in unpredictable markets.
Improved liquidity
With more assets eligible as collateral, you can free up funds for other trading opportunities while maintaining robust positions on margin. This ensures your portfolio remains active and responsive to market changes.
Strategic flexibility
The ability to combine assets with different haircuts enables fine-tuned margin strategies tailored to your risk tolerance and market outlook. Whether you prefer conservative or aggressive trading, expanded collateral options provide the adaptability you need.
Hedging and short selling opportunities
With access to margin trading and a diverse range of collateral currencies, traders can hedge their existing positions or take advantage of downward market movements through short selling. This opens up opportunities for profit regardless of market direction.
Leverage and capital efficiency
Margin trading can amplify your buying power, allowing you to take larger positions than your available capital. This capital efficiency is further enhanced by the ability to use a broader range of collateral currencies, enabling you to maximize potential returns while optimizing resource allocation.
New collateral currency choice
Here’s the new asset being added to Kraken’s margin collateral lineup, bringing the total to 54 options.
AssetHaircutEuro Finance (EURC)1%
Trade with caution
There is no guarantee that a limit order will execute. There is no guarantee of margin pool availability at all times. There is also no guarantee of a market order executing at a certain price. The availability and liquidity of the particular digital asset will impact these types of orders.
Ready to trade but don’t have a Kraken account yet? Sign up today !
Start margin trading on Kraken Pro
Availability of margin trading services is subject to certain limitations and eligibility criteria . Trading using margin involves an element of risk and may not be suitable for everyone. Read Kraken’s Margin Disclosure Statement to learn more.
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