We have expanded our selection of margin currencies and forward collateral to now include EURC.
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.
What is a collateral currency?
A collateral currency can be a fiat, crypto, or stablecoin currency that you can use to trade on margin. Unlike standard spot trading, margin trading allows you to open long or short positions by borrowing funds directly from Kraken.
When trading on margin, Kraken’s margin pool is used for buying or selling the cryptocurrency, while your collateral secures margin extensions. The collateral currency you use does not need to match the trading pair of the order book you are trading on, allowing greater flexibility to go long or short in any margined trading pair.
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.
Maximize the Benefits of Margin Trading
Expanding the range of collateral currencies can enables traders in several ways:
Tax benefits
In some jurisdictions, using digital assets as collateral rather than selling them directly 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 a single 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 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 profit opportunities regardless of market direction.
Leverage and capital efficiency
Margin trading 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
This is the new asset added to Kraken’s margin collateral lineup, bringing the total to 54 options.
| Active | Haircut |
| Euro Finance (EURC) | 1% |
Trade with caution
There is no guarantee that a limit order will be executed. There is no guarantee that the margin pool will be available at any time. There is also no guarantee that a market order will execute at a certain price. The availability and liquidity of the particular digital asset will impact these order types.
Ready to trade but don’t have a Kraken account yet? Register today!
