Need some help with leveraged trading.

[Tekunda]

I have transferred $1000 to Kraken in order to try my hand at leveraged trading.
But when I click 5x leverage it comes back with "insufficient funds".
I thought that with 5x leverage I would be able to trade with $5000 in btc until I get a margin call.
Why would I receive an insufficient funds warning right away, before trading has even started?
Could someone please explain in more detail how to margin trade bitcoin and show me the math for my $1k trading funds?

[1715141355]

1715141355

[1715141355]

1715141355

[1715141355]

1715141355

[1Referee]

Quote from Kraken's site;

Free margin is the amount of your trade balance that is available for opening new positions. Free margin is calculated as equity minus used margin. With equity of $8,750 and used margin of $2,500 free margin would be $8,750 - $2,500 = $6,250. Note that if you try to open a position for which you do not have sufficient free margin, the order will be automatically cancelled (with the message "Insufficient funds").

[Tekunda]

Quote from Kraken's site;

Free margin is the amount of your trade balance that is available for opening new positions. Free margin is calculated as equity minus used margin. With equity of $8,750 and used margin of $2,500 free margin would be $8,750 - $2,500 = $6,250. Note that if you try to open a position for which you do not have sufficient free margin, the order will be automatically cancelled (with the message "Insufficient funds").

Maybe I am too thick to understand, but how much is my used margin? In my example of $1000 trading equity  (and to trade with 5x leverage) what are my margin requirements? Maybe I have overlooked it, but I could nowhere find anything like per $1000 trade you need x amount of dollars as margin requirements?
Could you maybe give me a trading example, sticking to my intention to use $1k equity and 5x leverage?

[Nosk]

I have transferred $1000 to Kraken in order to try my hand at leveraged trading.
But when I click 5x leverage it comes back with "insufficient funds".
I thought that with 5x leverage I would be able to trade with $5000 in btc until I get a margin call.
Why would I receive an insufficient funds warning right away, before trading has even started?
Could someone please explain in more detail how to margin trade bitcoin and show me the math for my $1k trading funds?

If you send 1000$ to kraken, then you'll have an equity of 1000$ and a free margin of 1000$ as well.
If you leverage that *5, then you'll try to use 4000$ of margin.
4000$ > 1000$, here are the math :p

I think you might have to figure this out : If kraken agrees to loan you 4000$, then it is knowing that you have the cash to refund them in case of shitty calls.

tl;dr : If you want to trade a long of 1000usd with a leverage of 5, then you should have sent to the platform 5000usd.

[Tekunda]

I have transferred $1000 to Kraken in order to try my hand at leveraged trading.
But when I click 5x leverage it comes back with "insufficient funds".
I thought that with 5x leverage I would be able to trade with $5000 in btc until I get a margin call.
Why would I receive an insufficient funds warning right away, before trading has even started?
Could someone please explain in more detail how to margin trade bitcoin and show me the math for my $1k trading funds?

If you send 1000$ to kraken, then you'll have an equity of 1000$ and a free margin of 1000$ as well.
If you leverage that *5, then you'll try to use 4000$ of margin.
4000$ > 1000$, here are the math :p

I think you might have to figure this out : If kraken agrees to loan you 4000$, then it is knowing that you have the cash to refund them in case of shitty calls.

tl;dr : If you want to trade a long of 1000usd with a leverage of 5, then you should have sent to the platform 5000usd.

Thanks a lot.