We have expanded our selection of margin currencies, futures and Flexline collateral to now include HYPE and XAUT.
We are committed to providing traders with greater flexibility and control, and are excited to announce a significant expansion of our collateral opportunities for Kraken Pro traders.
With this update, the number of collateral currencies you can use for margin trading, derivatives and Flexline has increased to 56.
What is a collateral currency?
A collateral currency is a fiat currency, crypto, or stable coin that you can use to secure your positions in Kraken’s leveraged and credit products, including margin trading, derivatives, and Flexline. The same shared collateral pool powers all three, giving you maximum options across the entire platform with a single set of eligible assets.
How Warranties Work on All Products
Although the collateral pool is shared, each product uses it differently:
| Product | How the warranty is used |
| Margin | Your collateral secures funds borrowed from Kraken’s margin pool, allowing you to go long or short on any margined trading pair. Your collateral does not need to match the trading pair of the order book you are trading on. |
| Derivative products | Collateral is used to meet initial and maintenance margin requirements on futures and perpetual contracts. It backs your open positions and covers any mark-to-market losses. |
| Flexible line | Your collateral secures a line of credit, giving you access to funds without having to sell your assets, thereby preserving your assets while freeing up liquidity. |
Note: Unstaked assets and Kraken Rewards can be used as margin collateral. However, assets held in Kraken Pro on-chain staking cannot be used as margin collateral.
Maximizing the Benefits of Leveraged Trading
Expanding the range of collateral currencies allows traders in several ways:
Tax benefits: In some jurisdictions, using digital assets as collateral rather than selling them outright may defer taxable events. By leveraging collateral currencies for margin trading, traders can potentially reduce their immediate tax liabilities while maintaining exposure to their holdings.
Diversification of guarantees: By using multiple collateral currencies, you can better manage risk and reduce exposure to the volatility of any asset. This is particularly useful for traders looking to protect their positions in unpredictable markets.
Improved liquidity: With more eligible assets as collateral, you can free up funds for other trading opportunities while maintaining strong margin positions. This ensures that your portfolio remains active and responsive to market changes.
Strategic flexibility: The ability to combine assets with different discounts allows you to fine-tune margin strategies, tailored to your risk tolerance and market outlook. Whether you prefer conservative or aggressive trading, extensive collateral options provide the adaptability you need.
Hedging and Short Selling Opportunities: With access to margin and derivatives as well as a diversified collateral pool, traders can hedge their existing positions or take advantage of downward market movements via short sales. This opens up profit opportunities regardless of market direction.
Leverage and capital efficiency: Leveraged products can amplify your purchasing power, allowing you to take positions larger than your available capital. This capital efficiency is further enhanced by the ability to use a wider range of collateral currencies, allowing you to maximize potential returns while optimizing resource allocation.
New choice of guarantee currency
Here are the new assets added to Kraken’s collateral lineup, bringing the total to 56 options.
| Active | Haircut |
| Hyperliquid (HYPE) | 20% |
| Gold Tether (XAUT) | 40% |
Understanding Haircuts
When using a currency as collateral, Kraken applies a “haircut” to determine its effective value. This discount reflects the percentage reduction applied to the value of the asset to account for potential price volatility.
For example, if you hold an asset worth $1,000 at a 20% discount, its collateral value is calculated at $800. This approach ensures greater stability and reduces the risk associated with using volatile assets as margin collateral.
What to keep in mind
It is important to note that collateral assets used to open margin positions cannot be exchanged for other currencies or withdrawn while the position is open. These assets remain reserved as collateral and are visible in your account balance, but they cannot be traded or withdrawn. You can check the availability of your collateral assets at any time via the Funding tab of your Kraken account.
Ready to trade but don’t have a Kraken account yet? Register today!
The availability of margin trading services is subject to certain limitations and eligibility criteria. Margin trading carries an element of risk and may not be suitable for everyone. Read Kraken Margin Disclosure Statement to find out more.
Trading in derivatives and other financial instruments, including leveraged financial instruments, involves significant risks and is not suitable for all investors. See our Risk Disclosure to learn more.
Using Kraken Flexline involves risks, may have tax implications and may result in loss of capital. Borrowed assets subject to withdrawal limits. Availability of Kraken Flexline is subject to certain limitations and eligibility criteria. This page is for informational purposes only and does not constitute a recommendation for use of Kraken Flexline. View the Kraken Flexline Terms at www.kraken.com/legal.
