[00:01] Kraken have three main markets. They have spot trading, which is the normal cash-settled market. You want to buy there. Margin is where you can trade in the spot market, but you can borrow
[00:15] money from Kraken to go ahead and trade. And that's up to 10x in some assets. So, if you have a $1,000 of cash, you can open up a trade worth $10,000 at maximum, or 5,000, or 1,200, or whatever you want. And you'll borrow money from
[00:29] Futures is a completely separate product. So, you're not trading in the you're doing is trading a completely synthetic product that tracks the price trade futures if you want, and I've got a video guide on that down below if you
[00:44] margin for this video. I'll leave a link to Kraken as well down below if you want yet. I believe right now they're giving a bonus when you sign up by that link, so that may uh expire by the time you're watching this, but you can check all of
[00:57] down below as well. Um so, what we need to do here is figure out how we actually borrow money to go ahead and trade. So, if you trade margin here, it have margin. You can toggle this on and off. Notice
[01:11] just go back to trading spot. Cuz margin is spot, you're just borrowing money to trade spot. Uh and so, if you click on margin again, it just obviously goes to trade margin here. So, we can go up to the top left, and we
[01:24] can figure out what we want to trade. If you go to spot and margin, you can just trade, and it's going to tell you what the maximum amount of leverage you can use is. Leverage is simply how big is your trade size in relation to the
[01:38] pay for it. So, 10x means that you can open up a 10x leverage trade. You got a $1,000 cash, you can open up a $10,000 trade. That's the maximum. You don't have to use that much. Anything else that has a different
[01:51] uh x by it, like for example, this right here, which is 5x, so you can have a 5x leverage trade. $1,000 cash, $5,000 trade. obviously you get the idea. Uh so, you can figure out, you know, what margin
[02:03] here. It's going to just give you all of the different margin pairs. So, we're going to trade Bitcoin USDT, and we're going to trade with margin. The way that margin and leverage works, leverage is the trade size in relation to how much
[02:15] cash that you have. So, let's say you have $1,000 of cash on Kraken. You can open up a $2,000 trade, no problem, and Kraken will lend you the money. Now, that's $1,000 of debt that you have now to Kraken. And the reason they loan
[02:28] $1,000 of cash there to pay it back at some point. Now, if you make money, so you make money in the trade, the trade goes up, no problem, right? You get your great. Worst case scenario, you have $1,000 of
[02:41] cash to pay for potential losses. You opened up a $2,000 trade. So, now if that $2,000 trade goes down and you lose money on it, and you have $1,000 now, so you have $1,000 of, you know, assets in that trade, and you have $1,000 of cash.
[02:56] bad debt. So, they will take your $1,000 of cash, they will close the trade, they will pay off the loss, and now you have no money. So, when you're taking leverage, each percentage movement in the price is
[03:09] bigger in relation to your underlying cash, right? If you have $1,000 cash and $1,000 trade, the thing can go down 100%, you're not going to lose that liquidated. You still own the asset. But when you trade with leverage, so now
[03:22] you're borrowing money, only a 50% move wipes out your initial cash. $1,000 cash, $2,000 position, 50% down, it wipes out your cash, you get liquidated. Obviously, on the upside, if you're making money as well, then you're
[03:34] making more money in relation to your cash as well. But, you know, at its from Kraken, and you have to pay that back in the future. If you make profits in your trade, you can pay the loan back and keep the profit. If not, then you
[03:47] have to obviously take the loss, and also pay back the cash from your cash you want to trade on leverage on Kraken, then there's two ways to fund your trades. So, on the right-hand side of the portfolio tab here, notice the
[04:00] and you can turn this on or off dependent on what you want to do. So, if it's off, then margin is going to be separate from futures. So, you have, let's say, $1,000 of cash and Bitcoin in your spot
[04:15] account, and that can be used as margin, right, as collateral to fund any trades Futures is separate, so if you want to go ahead and trade futures, you need to separately put some cash into your futures account to go ahead and trade
[04:28] that. If you turn the unified wallet on, then margin and futures are going to be funded together by all of the assets in That may make things a little bit more complex for you if you've got both
[04:41] margin and future trades on at the same time. Cuz what can happen is that your those trades, maybe they're making profits, that will actually add to the equity of your account because if you've got profits in the market, you know, you
[04:54] can liquidate those immediately and that's an you know, an actual asset that profits in future trades, you can have equity from that to actually fund other trades that you have. Um and then if you have some assets in your spot account,
[05:07] positions together. Now, that's definitely for more professional people, right, because if your entire account has an amount of and futures, you know, things can turn south pretty
[05:20] quickly as well and suddenly futures and margin are all losing together and suddenly you get wiped out. So, definitely consider whether you want to or whether you want to split different assets into spot and margin and then
[05:33] trade and how it looks like once you've got the trade open with the margin loan margin, we're trading in the spot market, so let's say that I'm going to buy some Bitcoin here. What I'm actually doing is borrowing money from Kraken and
[05:47] then buying the Bitcoin. The Bitcoin becomes my asset. It's my property at that point. The only other thing I have on Kraken is now a loan, a debt to point. There's two ways to pay it off. You either sell out of your trade, so
[06:00] going to give you cash, you can pay off the loan, and then you either gain or loss lose from the trade. The other way is just to deposit more money onto the you're going to pay off the debt that you have to Kraken, and then you'll keep
[06:12] the assets, obviously. So, you can just pay off that loan have any loan anymore, anymore. So, let's go I'll just show you a market to buy. Now, what you can see here is that
[06:24] Kraken uses portfolio leverage. So, you've got an amount of cash and assets in your your platform, right? You're your account. And what you're going to do here is open up a trade. Now, if my trade size is below the
[06:37] amount of cash and assets I have, you don't have any leverage. You can see your portfolio leverage here is .27. So, this is underneath the amount of cash and assets I have. If you start to trade more than that, starts to go up. So, if
[06:49] I trade $50 here, that's more than I have. So, my portfolio leverage, that is the cash and other assets I have in my spot account, what's that worth? versus my trade size. So, my trade size is now bigger than that, so I'm taking
[07:03] And, you know, nowhere near the maximum amount of leverage I can take is this much, which is let's say I've got, you know, $40 in the account times 10 is about $400, right? Minus trading fees and a little bit of
[07:16] worst-case scenario, you lose money, leeway there. using this much portfolio leverage here. So, even though we're trading 10x
[07:29] trade size in relation to my cash and assets, is only this much, 1.33. So, we'll just go ahead and buy this. You want to confirm? Yes, is that that's that traded, right? And that is now a position that we have,
[07:45] So, we bought the Bitcoin, we have that asset in our account. We also have a loan, a debt to Kraken that we need to either pay off or trade out of this, get need to pay off that loan at some point now. Once you've got that trade open,
[07:58] you can go back into your portfolio tab here, and then you can see exactly how the right-hand side, this is the trade that we have open. So, this will be all to the assets that you have on the platform. So, my balance is $44. That
[08:12] includes these assets that I have. So, some USDT, uh Tesla, X stock, and uh Bitcoin. change depending on the prices of Bitcoin and Tesla. The cash will remain
[08:26] the same. The leverage is my portfolio leverage. So, assets on account, $44. relation to that? So, the leverage I'm using is 1.34x. Um this is the collateral value that I have, my unrealized P&L in the trade,
[08:42] and then my margin equity as well. So, you can see the um the equity is going your account. If you're just using cash to margin your trades, uh then that cash value is not going to change, right? $1,000 is $1,000. If you've got other
[08:55] assets in here, Bitcoin, Tesla, whatever else, um then those will be marked to market every second or so, right? And they will have differing values over that time. Um and of course, your trade is going to either win or lose.
[09:08] And that's going to affect your margin equity because your account equity is cash and assets plus profits or losses, right? So, if you have losses, that's you're making gains, so if you have Bitcoin and Tesla and they go up in
[09:20] value, well, you you have more assets in your account marked to market versus your trade size. If your trade wins, you then have equity because that can be equity can add to your account in relation to the amount of uh loan that
[09:33] is we've taken a loan from Kraken. How do you figure out that loan? You come here to open positions on the right-hand side um there's just above my head here, you can see this options box. Um so what we can do is click X. So this says close
[09:49] It won't close it immediately. If you click this, how do you now take this trade out? Well, you can asset that you just bought. You can sell the Bitcoin. And what will happen is
[10:03] your profit and loss in the trade will be exchanged. And then you'll pay back Right? So we have a loan from Kraken. That's a debt. How do you pay that debt back? Well, sell the asset that you just bought. And if you made a profit, you
[10:16] profit. If you made a loss, you'll pay off the loan and then obviously pay out loss in the trade. way, like I said, is to pay off the loan with cash, which
[10:30] So what we've done is we've bought this Bitcoin. That is ours now. We actually exchanged that. That's our property. That's our assets in the platform. We'll pay off the loan. And if you do that, then you've paid the loan off.
[10:45] You've exchanged some USDT, uh which is right here. So we're going to be paying off cuz we bought a USDT loan We got a USDT loan here cuz we're trading Bitcoin USDT. So that's the loan that we need to pay off.
[10:57] off the loan. You paid off the loan and you keep the If you want to settle, you can do that here. You can settle an amount, right? So you can see that. I just want to settle that long position.
[11:10] loan. All right, so you're paying off the loan but keeping the asset. So all to pay off the loan. Or we can come to trade here on trade margin. And then the same asset pair. So you can buy, you can add your
[11:23] loan. Or if you press sell, you can see sell here. What this does is it starts paying off the the loan that you have because you can see the leverage that to pay off more of the loan, essentially sell the asset, selling out the trade,
[11:37] automatically be paying back some of the loan here. My portfolio margin right now is 1.34x. It as soon as I pay the whole thing off, then I'll pay the whole loan off and my portfolio leverage will go down to zero.
[11:50] out of this trade as well. So, we're going to sell uh we're going to sell the whole entire amount. Uh now, remember you have to pay some trading fees here you made in the trade, that will be exchanged out of your assets as well. Um
[12:03] Now, remember with future with margin, sorry, we're taking a loan from Kraken. longer that you have the loan open, the more you'll be paying an interest. There's also a roll fee as well. If you come to the buy section, you can see
[12:16] that all here. So, if you go to estimated margin fee, um you can click can work out what the interest and roll fees will be over some sort of period, rate, uh and you can figure out if you want to pay that. You obviously have to
[12:31] we have to pay the interest, um and then the roll fee as well. Um and so, what of this trade, pay the trading fee. So, close. Yes, confirm. What that will do is sell out the Bitcoin that I had and that will
[12:44] had. So, now we shouldn't have any leverage on the account and we just taking out the trade. If you need to get set up on Kraken Pro, I'll leave the below and the future trading guide, I'll leave that down in the description as
[12:57] you can get a bonus right now as I'm making this video about that link. My for watching and I'll see you in the next video.