Coinbase Vice President of Business Hints at Exchange’s Next Steps for Leveraged Margin Trading
The Block Crypto reports that Emilie Choi, VP of Business, Data & International at Coinbase, has confirmed in an interview that Coinbase is looking at margin trading.
Buying on margin is borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you'd be able to normally. In other words, margin trading lets traders “amplify trading results” by being able to “realize” greater returns on “successful trades.”
Margin trading is a widely-used trading method in low-volatility markets – including international Forex, stock, and commodity markets. This would allow users to take riskier positions while trading but also with higher profits as well.
There are some digital asset trading platforms that let users borrow funds to engage in margin trading. When a margin trade is initiated, the trader will be required to commit a percentage of the total order value. This initial investment is known as the margin, and it is closely related to the concept of leverage.
“Margin lend borrow is definitely going to be the next big step for us, especially on the active trader side. We still need to figure that out because there's not a lot of regulatory clarity there right now in the US. We couldn't probably be more differentiated than them in terms of the focus on the fiat to the crypto bridge and being that safely trusted center of the crypto economy. So I think they're playing one game, we're playing another.”