Kucoin Margin Trading Explained with Leverage, Interest and Fees

Kucoin Margin Trading Explained with Leverage, Interest and Fees

This article explains Kucoin’s margin trading regarding leverage, interest, and fees. Crypto margin trading is spot trading with leverage.

Kucoin is one of the top Bitcoin and altcoin crypto trading platforms for spot market fees, trading features, earning opportunities, and more.

About KuCoin Crypto Exchange

Kucoin crypto exchange is famous for being the “People’s Exchange” because it’s for all classes of investors with an easy-to-use interface. In addition, Kucoin accepts users from all around the world.

Kucoin is the top 1 altcoin exchange with over 672 tradeable cryptocurrencies and more than 1213 trading pairs, according to Coingecko

Also, Kucoin is a great place to find the next crypto gem since several altcoins and crypto gems have had their primary listing on Kucoin, including but not limited to BLOK, CHMB, VR, KMA, and DAO.

Kucoin offers features like spot trading, margin trading, P2P fiat trading, futures trading, staking, and lending to over 10 million users in 207 countries and regions globally. 

For crypto spot trading, Kucoin is in the top 5 in terms of crypto exchange trading volume, according to Coingecko and Coinmarketcap.

What is Kucoin Margin Trading?

Kucoin margin trading is trading with leverage because of the spot market order book. Margin trading involves traders “leveraging up” their trades beyond the existing capital they have on the account.

To do margin trading, you have to use either cross margin or isolated margin to secure that you can give back the borrowed funds. Kucoin’s algorithms continuously monitor your margin level to make sure to announce a margin call at the right time and, if necessary, liquidate the position.

What is Kucoin Cross Margin?

You can only have one Kucoin cross-margin account. In a cross-margin account, all open positions share the margin level.

Kucoin calculates the margin level according to total asset value and debt in the Kucoin Cross Margin Account. 

The Kucoin margin trading system will check the margin level of the Cross Margin Account and notify users about supplying additional margin or closing positions. Once liquidation happens, all cross-margin positions will be liquidated. 

What is Kucoin Isolated Margin?

Kucoin’s isolated margin means each trading pair has an independent Isolated Margin Account.

For example, there is one BTC/USDT Isolated Margin Account, and only BTC and USDT can be transferred in, held, and borrowed to this account.

Kucoin calculates the margin level for each Isolated Margin Account. So, for example, if your margin level is too low in the BTC/USDT account, you must add BTC or USDT to that isolated margin account.

Risk is isolated in each Isolated Margin Account. Once liquidation happens, it will not affect other isolated positions

Kucoin Cross Margin VS Isolated Margin

Kucoin Isolated Margin Advantages: Losses are limited to the margin on the isolated margin account.

Kucoin Isolated Margin Disadvantages: A trade can more easily be liquidated before it potentially becomes profitable.

Kucoin Cross-Margin Advantages: Open positions can utilize the entire margin balance of the cross margin account to avoid early liquidation.

Kucoin Cross-Margin Disadvantages: The entire account balance will liquidate in a cross-margin account since the account uses the whole cross-margin account balance as margin.

Kucoin Margin Trading Fees

What are the fees associated with Kucoin margin trading?

Kucoin charges the same fees for margin trading as for spot trading. However, there is an additional fee for margin trading since you have to borrow funds to leverage your position.

Here, Kucoin offers a peer-to-peer (P2P) lending market where the rates are dynamic and dependent on market conditions.

You can either bid on the open market (manual borrow) or simply enable auto-borrow.

Manual Borrow: The user borrows assets first, then makes a trade. The user must manually borrow assets from the peer-to-peer lending market before they can trade. Enter the market by clicking “Earn,” “Crypto Lending,” and the “Borrow” tab.

Auto-Borrow: The system automatically borrows assets when a user places an order. The user only needs to configure their leverage multiple. When the user places an order, the system automatically borrows the amount required for the trade. Order placement and borrowing are executed at the same time. Users can toggle this function in accordance with their trading needs.

You find the auto-borrow toggle in the Kucoin margin trading screen. Above you also see the Kucoin Token KCS pay toggle switch.

Kucoin auto borrow toggle screenshot

The Advantages of KuCoin Margin Trading

There are several advantages to Kucoin’s margin trading.

  • Isolated Kucoin margin trading with Up to 10x Leverage
  • Cross-margin Kucoin trading with up to 5x Leverage
  • Kucoin margin trading supports 160+ cryptocurrencies
  • Kucoin arranges many trading bonuses and giveaways

Guide: How to Trade on KuCoin Margin

Here is a step-by-step guide on how to trade Kucoin margin trading.

  1. Sign up with Kucoin
  2. Login to your account
  3. Go to “Trade” and “Margin Trading”
  4. Fund your margin trading account (There are several options, but one way to do this is to look for the “Transfer” button, which you can find in the red circle below. Click on “Transfer,” and you will see a popup window where you can click forward to “Go transfer.”
Transfer Funds to you Kucoin margin trading account

5. Once you see the Kucoin transfer pop-up window, the steps are straightforward. Here, fill on from what account you want to transfer the funds and if you want to fund the cross margin account or any isolated margin accounts.

After this, select what cryptocurrency you would like to transfer.

6. Borrow funds to trade margin.

You can borrow from the market by yourself or enable Auto-Borrow to authorize the system to borrow funds to the best available rate automatically. In addition, Kucoin uses a peer-to-peer market for margin lending.

7. Close the position and repay

Kucoin Margin Trading Tutorial Video

Crypto Margin Trading VS Crypto Derivative Trading

Crypto margin trading is trading from the spot order book with the possibility to lend for creating leverage.

Crypto derivatives trading is trading in other order books separated from the spot market order book. These derivatives are not trading at the spot price since these are contracts deriving their value from the underlying asset. Crypto futures and crypto options are two examples of crypto derivatives.

Maring Trading Sites

Still not sure if Kucoin is the best margin trading site for you?

Read our full comparison between Kucoin and Binance in our Binance VS Kucoin article. Here, we compare fees, leverage, supported countries and much more!