Margin trading means you can originate a loan through Bibox in order to get more funds to trade. For margin trading, you firstly need to transfer the funds from your master account to margin trading account as your margin.
Bibox is able to provide users with three times leverage at its highest, namely, you can borrow maximum two times of your own funds in the margin trading account.
1. How to start Margin Trading？
To use "Margin Trading", users need to create a "margin account" first.
2. What is a margin account?
A margin account is a special account set up by Bibox for margin trading to safeguard investors' fund security. In order to do margin trading on Bibox, investors need to create a "margin account" and transfer funds from their master account to their margin account. Funds in this margin account will be used when investors conduct Margin Trading or other financial derivatives transactions. The investor's master account will not be used for these transactions (the master account is used to top up and withdraw money).
3. What is Leverage?
Margin is often referred as "leverage" by investors. "Leverage" enlarges the tradable amount of investors, and at the same time increases the investors’ returns as well as risks.
4. What is the leverage ratio offered by Bibox?
Bibox offers three times leverage to investors. For example, the net asset in your margin account is 10BTC. You can borrow 20BTC from the market, making your total assets 30BTC. All of 30BTC can be used for transactions.
5. Borrowing and lending
The borrowers can repay the loan ahead of schedule, while the lenders cannot recall the loan in advance. While a deal can be made but the rate set by the borrowers is different from lenders, the latter shall prevail.
6. Borrowing period
The time period for each loan is 7 days. If borrowers are late on a payment, the system will automatically borrow a new sum of loan at the optimal rate from the market to repay the previous loan and transaction fee. Interest on the new borrowing will accrue anew. Both accrual interest on the borrowing and repayment are settled by per transaction. For each borrowing, users can choose to repay all or part of the loan at any time. When making partial repayment, commission charges shall be repaid first.
7. How to calculate interest?
Interest will be calculated starting at 12:00 A.M. (GMT+8). Bibox.com takes 24 hours as a day (less than 24 hours will be counted as one day) and interest is accrued once per day. This simple interest only calculates the interest charged on the principle. Interest Formula is：Interest = principle * interest rate * time
8. What is forced liquidation?
At Bibox.com, the users shall remain a certain proportion of margin for each loan. In case of adverse changes in the market, for example, when a reverse occurs in the market, and the total assets in the margin account shrink to a certain extent ((Principal + Total Loan) / (Total Loan + Interest)*100%) ≤110%, user’s assets will be forced to sell or buy with current liquidation price in order to liquid the loan and transaction fee. If liquidation failure occurs (which is of small probability), namely, there is not enough money to pay off the loan after forced liquidation. On such an occasion, the losses shall be borne by the lender. Lenders can choose to buy insurance against the risk.
Price Index: The current price index of bibox is weighed based on the price information of such five digital assets exchanges as CoinMarketCap、CoinCap、Binance、Bitfinex and Bibox.
Estimated FOB Price/ Forced Liquidation Price: The price is based on the assets and loans of your current margin account. It is for reference only. The actual result is subject to the final execution of the system.
Current Liquidation Price/ Latest Price: price of Bibox.
9. What is insurance? Is it mandatory?
Lenders can choose to buy insurance. If lenders have bought the insurance and forced liquidation has failed (which is of small probability), the investor protection fund will reimburse the lenders for their losses until the fund is used up. The lenders who have not bought the insurance shall bear the losses on their own. The investor protection fund is composed of 10% of the commission incomes from the purchasers.
Bibox.com has no legal liability for any risks in forced liquidation due to reasons including not being able to access the network resulting from network failure. In order to maintain the stability of the Margin Trading market, we may temporarily suspend new Margin Trading at any time according to the market fluctuations and risk control system, but borrowing and lending that have been completed successfully will not be affected.