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December 11, 2017, 05:42:05 PM |
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Hello,
Quick question regarding margin trading on a bitcoin exchange (polo or Bitfinex or any other offering Margin trading).
**Scenario :**
*for the sake of this example, we will assume 1 btc = 1000.00 USD. and I will be trading on a USDBTC trading pair*
I deposit 1 btc in my margin account, and want to GO LONG @5x for 5000.00 USD.
I get a loan of 5 BTC from lenders of that exchange to fill my position.
The question is :
If I have BTC in my account, and lender provide BTC for margin trading, how does the exchange execute a BUY order when I open my position if I do not have USD ?
I assume there is some sort of USD/BTC conversion when opening my position and buying btc ?
I would really appreciate a technical answer.
PS : Please please please, do not just paste a link to a FAQ or refer me to the exchange calculator, I have checked before asking here and I need a technical reply, some sort of mathematical equation.
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