Bitfinex gives people the option of trading bitcoin and other cryptocurrencies using “Exchange Trading” or “Margin Trading”.
Use this link to trade on Bitfinex, you will earn a 10% discount on your trading fees for a month.
Exchange Trading is easy to understand. You as the trader have 1BTC to sell to USD for X amount.
You would initiate an order on the exchange option to sell your 1BTC for that amount.
When the order is filled you will get the amount that you offered your bitcoin.
Quite simple yes?
Margin Trading is pretty similiar to exchange trading however you are using leverage.
Leverage allows you to trade without putting up the full amount, but instead a margin amount is required.
Bitfinex lets you leverage 3:1 which means if you wanted to trade with 3BTC, a required equity of 1BTC is required to make a purchase. Bitfinex allows up to 3.3:1 leverage or 33% equity of the trade amount.
Which means traders only need 33% of the value of the trade.
This is similar to CFD trading that most traditional Forex Brokers offer.
Margin Funding is a service they provide. Its basically a loan that you make to other traders on the exchange and they can use at an agreed rate of interest.
Firstly you offer your bitcoin to traders who then use it to margin trade a particular pair that they’d like.
When your offer is taken by a trader, the money in your funding wallet will be used by the trader to buy or sell.
When the trade is complete or closing of the position, the money that was used will be returned to your wallet.
Interest is paid on daily basis in the same currency that was provided.
So if you lent USD your interest will be paid in USD. The same goes with the different cryptos that you fund (if Bitfinex has margin trading available for those coins)
If you’d like to earn some more money on your funds, then consider using Bitfinex to earn some money with hardly any risk.