Short-selling is a popular trading strategy which is now accessible to both retail and institutional investors on crypto exchanges like KuCoin . By shorting an asset investors can profit from its price decline . In this comprehensive guide we will delve into the specifics of how to short on KuCoin by using margin and futures products .
KuCoin offers the opportunity to short Bitcoin and other digital assets . The platform provides leverage options of up to 5x for cross-margin and up to 10x for isolated margin . The process of shorting crypto on KuCoin follows a similar pattern to other platforms . Traders who anticipate a future price drop can sell the asset at its current value, buy it again later at a lower price and use borrowed funds from KuCoin or derivatives contracts .
Short-Selling on KuCoin: Methods and Leverage Options
The first method is trading with borrowed funds which allows investors to make trades beyond their initial investment . While this strategy can generate substantial rewards it also comes with significant risks . The investor’s initial capital serves as collateral while the borrowed funds from the exchange are referred to as leverage . KuCoin’s margin options include cross margin (up to 5x leverage) and isolated margin mode (with a maximum leverage of 10x) .
The second method available on KuCoin is futures trading . This product functions as a derivatives market where experienced traders can expand their trading volume and profit by using leverage . Investors can enter leveraged futures contracts and trade with Bitcoin and other cryptocurrencies .
In order to start short-selling on KuCoin investors need to follow a few simple steps:
First of all sign up and create an account on KuCoin through the website or mobile application .
KuCoin does not require an immediate Know Your Customer (KYC) process for depositing funds . Users can add either crypto or fiat to their wallets through the Deposit button on the user dashboard . KuCoin does not charge any deposit fees and the funds will be credited to the user’s spot wallet .
Transfer the deposited funds from the spot wallet to the margin wallet to engage in short-selling . This can be done by clicking the Transfer button under the asset overview .
Then access the KuCoin margin market by clicking the Trade button at the top of the dashboard and selecting Margin Trading from the dropdown menu .
In order to short-sell a particular crypto pair borrow funds from KuCoin by tapping on Borrow at the base of the screen . Choose the coin you desire to borrow, specify the amount of it and then confirm the loan .
Return to the margin market and start a short trade by using the specific coin pair . Enter the leverage amount (up to 5x for cross-margin and 10x for isolated-margin), set the price for the short trade, determine the portion of funds to be used and perform the trade . It is important to note that trading fees apply to all executed trades .
Once the trade is completed and all orders are closed you should repay the loan and accumulated interest . Click the Repay button at the base of the screen, enter the repayment amount and complete the transaction .
Short-Selling on KuCoin with Futures: Leveraging Derivatives for Higher Volume
For short-selling on KuCoin using futures follow these steps below:
Visit the KuCoin website or use the mobile app to sign into your account .
Click Deposit to access the spot wallet balance and deposit either crypto or fiat currencies .
Then move the deposited funds from the main account to the futures account by using the Transfer button . Make sure that your KuCoin Futures trading account is enabled before proceeding with this step .
Enter the KuCoin Futures market by clicking the Derivatives button and selecting the desired futures market option such as Futures Classic, Futures Lite or Futures Brawl .
Finally pick the trading pair, order type, futures contract leverage amount and quantity of funds to trade in . Start performing the trade by setting a limit order, market order or stop order .
Through following these steps traders can engage in short-selling on KuCoin which utilizes margin and futures products to maximize potential profits in the crypto market . It is important to conduct thorough research and be cautious when using these strategies as they involve inherent risks .
