We are committed to offering traders greater flexibility and control, and we are delighted to announce a significant expansion of our collateral opportunities for Kraken Pro Traders.
What is a collateral currency?
A collateral currency can be fiat, crypto or stablecoin that you can use to negotiate on margin. Unlike standard trading, margins trading allows you to open long or short positions by borrowing funds directly from Kraken.
When you negotiate on the margin, the Kraken margin basin is used for the purchase or sale of cryptocurrency, while your warranty ensures the extensions of the margin. The collateral currency you use does not need to match the trading pair of the order book on which you negotiate, allowing greater flexibility to go for a long time or short in any pair of trading activated by margin.
NOTE: Active ingredients that are unpaid and Kraken can be used as a margin guarantee. However, the assets held in the clearance of Kraken Pro On-Chain are not eligible to use as a margin guarantee.
Maximize the advantages of margins trading
Expanding the range of collateral currencies can empowers Traders in several ways:
Tax advantages
In some jurisdictions, the use of digital assets as a guarantee rather than selling them downright can transfer taxable events. By taking advantage of collateral currencies for margins trade, traders can potentially reduce immediate tax responsibilities while maintaining exposure to their assets.
Diversification of guarantees
Using several collateral currencies, you can better manage risks and reduce exposure to volatility in any unique active. This is particularly precious for merchants who seek to protect their positions on unpredictable markets.
Liquidity improvement
With more eligible assets, you can release funds for other negotiation possibilities while retaining robust positions on the sidelines. This ensures that your portfolio remains active and responsive to market changes.
Strategic flexibility
The ability to combine assets with different haircuts allows refined margin strategies adapted to your tolerance to risk and your market prospects. Whether you prefer conservative or aggressive exchanges, the widen guarantee options offer the adaptability you need.
Hbidging and shorts sale opportunities
With access to margins trading and a diversified range of collateral currencies, traders can cover their existing positions or take advantage of the downward market movements thanks to an uncovered sale. This opens up profit opportunities regardless of market management.
Lever and capital efficiency effect
Marketing trading can amplify your purchasing power, allowing you to take more important positions than your available capital. This capital efficiency is further improved by the ability to use a wider range of collateral currencies, allowing you to maximize potential yields while optimizing resource allocation.
New collateral currencies
Here is the list of 8 new assets added to the range of Kraken margin guards, bringing the total to 52 options.
| Active | Haircut |
| SPX6900 (SPX) | 20% |
| Algorand (Algo) | 10% |
| Ondo (Ondo) | 10% |
| Fartcoin (Fartcoin) | 20% |
| Artificial superintelligence alliance (FET) | 10% |
| Uniswap (uni) | 10% |
| Curve Dao Token (CRV) | 10% |
| Ethena (ENA) | 10% |
Understand the haircuts
When you use a currency as a guarantee, Kraken applies a “haircut” to determine its effective value. This haircut reflects the reduction percentage applied to the value of the assets to take into account the potential price volatility.
For example, if you have an active $ 1,000 with a 20%haircut, its collateral value is calculated at $ 800. This approach guarantees greater stability and reduces the risk associated with the use of volatile assets as a margin guarantee.
What to keep in mind
It is important to note that the collateral assets used to open the positions of the margins cannot be exchanged for other currencies or withdrawn while the position is open. These assets remain reserved as a warranty and are visible in the balance of your account, but they are limited to negotiations or withdrawals.
You can check the availability of your warranty assets at any time via the financing tab of your Kraken account.
Ready to exchange but you have no Kraken account yet? Register for Kraken Pro today!
The availability of margin trading services is subject to Certain eligibility limitations and criteria. Trading using the margin implies a risk element and may not suit everyone. Read Kraken margin disclosure statement To find out more.
Investment services, auxiliary services and investment activities (“services”) in relation to derivatives in the European economic field are provided and carried out by Payward Europe Digital Solutions (CY) Limited. (“PEDSL-CY”). PEDSL-CY is authorized and approved by Cyprus Securities and Exchange Commission (CYSEC) with the license number 342/17. PEDSL-CY is registered in Cyprus with the recorded number HE 356603. Read our declaration of risk disclosure to find out more about risks.
For all other markets, excluding the United States, Payward Digital Solutions Ltd. is authorized to carry out digital asset activities by the Bermuda Monetary Authority. Read the disclosure of the risks of Kraken derivatives to find out more.
Commercial derivatives and other financial instruments, including leverage financial instruments, include significant risks and are not suitable for all investors. You could lose more than your initial investment.
