If want to make money by actively trading bitcoin, you can now also do so using leverage and thereby potentially earning excellent trading profits. In this post, you will be introduced to leveraged financial trading and the top 5 brokerages you can use to trade bitcoin using leverage.
What is leverage in financial trading?
In the financial markets, leverage refers to the use of borrowed funds to purchase a financial security. Leveraging is most common through the use of CFDs (Contracts-For-Difference) or when spread betting. For example, using leverage you can purchase 20 times the value of your initial invested capital using a 20:1 ratio. This a common ratio in currency trading.
Some brokerages even allow you to leverage up to 200:1. That means that when the price of the underlying asset moves up by 5 points, will make gain 1000 points. However, it is imperative to note that if the trade goes against you and the security drops in value you can also lose 1000 points. Hence, it is advisable not to use too much leverage when trading. And to never trade using leverage with money you can’t afford to lose.
The top 5 brokerages that allow you to trade bitcoin using leverage
If you are comfortable with trading using leverage and believe you have a firm grasp on bitcoin prices movements you can use the following five online brokerages to trade bitcoin using leverage.
Whale Club is an online brokerage that allows you to trade bitcoin using up to 40:1 leverage. Furthermore, it allows you to trade other asset classes such as Blue Chip Stocks and currencies using bitcoin as the base currency with zero trading fees.
It is has become a very popular financial trading platform for cryptocurrency enthusiasts as is it is purely cryptocurrency-based and, therefore, doesn’t require a long onboarding process, as no banks are involved.
1Broker is a bitcoin forex and CFD brokerage that aims to connect bitcoin to the global markets. Similarly to Whale Club, it allows you to trade financial securities, such as stocks, commodities, and currencies, using bitcoin as the base currency.
eToro is the world’s leading social trading platform. What is social trading? It refers to a new type of financial trading that uses social networks that allow you to copy trades of ‘professional traders’ to generate a profit. It is also often referred to as ‘copy trading’ and has become very popular in recent year. eToro is the market leading social trading platform and also offers its users the option to bet on the price of bitcoin.
IG Group is one of the most established online trading brokerages in the United Kingdom. It offers its users a spread betting and a CFD trading platform and covers a wide range of markets and financial products. It has recently also added bitcoin as one of its tradable assets and allows you to trade bitcoin using leverage on its CFD trading platform IG Markets.
Plus500 is an established UK-based CFD trading platform. It offers CFD trading for a wide range of asset classes and securities. BTC/USD is one of them. You can trade BTC/USD using a leverage of 10:1 using CFDs (Contracts For Difference). You can also trade the cryptocurrency Litecoin on Plus500’s trading platform, making it a popular CFD brokerage for cryptocurrency ethusiasts around the globe.