The past few years has seen a big shift in the number of traders in South Africa tapping into international markets. As more and more markets become available to South Africans, the number of beginner and advanced traders has increased, as well as their earnings. Margin trading has also seen an international increase, with many traders moving into full time pursuits.
To offer a helping hand to local traders, we’ve put together a list of the 3 best margin trading platforms in South Africa 2020.
What Is Margin Trading?
For those new to the scene, margin trading is trading but with the opportunity to tap into more capital. Margin trading is essentially where platforms offer users the chance to borrow money and leverage their trades. This gives traders the opportunity to increase their buying power, and therefore their returns. Each platform differs in terms of their borrowing rate, some might work on a 1:1 ratio where users need to provide equal amounts of capital to what they are looking to borrow, while others might go for 3:4 ratio. The platform also implements margin calls, where if the trade starts doing badly the user can stop their losses, as well as interest on the loan.
Margin Trading Terminology You Should Know
If you’re new to the scene, you might come across a few new terms. Here is a quick guide to the terminology you might find yourself immersed in:
- Minimum margin: the initial investment required to start margin trading.
- Margin rate: the interest on the loan.
- Initial margin: the percentage of the asset’s purchase price (that you’d like to borrow).
- Maintenance margin: min amount of funds needed in your account before the margin call.
- Margin call: investor needs to add more capital or sell off assets in order to be above the maintenance margin.
3 Best Margin Trading Platforms in South Africa 2020
Now that you’re up to speed with margin trading. Let’s take a look at the top 3 best margin trading platforms in South Africa for you to start profiting off of.
SnapEx is a new frontier on the trading landscape, offering traders a fresh take on margin trading. The platform has done away with order books, instead offering users a more simplified and modern approach to leverage trading. Focused on cryptocurrencies, traders can get up to 100x on a wide variety of cryptocurrencies.
Since launching in 2018, the platform has expanded to several different countries and experienced wide growth in both user base and trading volume. The platform is available in 8 languages and offers strong security protocols, including 256 bit SSL encryption, 2FA and hot and cold wallet storage solutions. The platform’s trading fees are 0.15% with the added bonus of no maker/taker fees.
On SnapEx, users can trade the following assets: Bitcoin (BTC), Cardano (ADA), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), EOS, Bitcoin Cash (BCH), Ethereum Classic (ETC), and Tether (USDT).
PrimeXBT is a cryptocurrency exchange that has incorporated crypto, forex, and commodity trading, as well as crypto margin trading. Operating from 3 international locations, the platform is available in over 150 countries and has done well to establish themselves since opening in 2019. PrimeXBT offers leverage trading on 5 cryptocurrencies, up to 100x, and pools their liquidity from 12 major exchanges. The platform also offers margin trading on several commodity and forex options, up to 1,000x.
The crypto leverage trading platform also makes use of top security features like SSL encryption, hot and cold wallets, and 2FA. While more traditional brokers will call for more capital when the margin call is released, PrimeXBT will close the position immediately to limit risk and losses that may be incurred. Trading fees range from 0.01% – 0.05%.
On PrimeXBT, users can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and EOS.
FTX is a cryptocurrency derivative exchange that aims to offer traders a platform that is “robust enough for professional trading firms and intuitive enough for first-time users.” FTX offers traders an opportunity to enter the cryptocurrency markets through its leveraged tokens and future tokens, including the platform’s own unique FTX token. The platform offers a modern, albeit intricate, approach to trading, using features like a three-tier liquidation model, rate-limited orders, and an insurance fund.
Mimicking traditional futures markets, FTX uses one universal stablecoin wallet to share the collateral across all the tokens. The platform offers liquidy, risk control, and innovation to the crypto trading space. The platform’s maker and taker trading fees are 0.10%, as well as a daily management fee of 0.03%. The more you trade, the lower your fees.
On FTX, users can trade Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Tether (USDT), True USD (TUSD), USD Coin (USDC), PAX, and leveraged tokens supported by FTX.
Leverage Your Crypto Trading
Now that we’ve covered what is margin trading, some key terminology and the top 3 crypto leverage trading platforms you should be familiar with, and ready to take on, the crypto margin trading world. Best of luck as you navigate these 3 best margin trading platforms in South Africa 2020.