Leveraged trading, which is offered on CleverCoin as “Boost spot contracts”, enables traders to gain on the Bitcoin price going up or down with a multiplier. It essentially allows users to buy or sell more bitcoins than what they can afford with the funds in their wallet.
CleverCoin's Boost spot contracts are currently limited to a 10x leverage, meaning traders can buy or sell ten times the amount they hold, which allows them to increase their profit margins tenfold. Losses, on the other hand, are limited to 50% of a trader’s funds, as CleverCoin margin calls these trades at a loss of 5% - effectively meaning that the Boost spot contract is halted as the trader risks to lose more than what his deposit is worth. The contract can be left open up to a maximum of 48 hours, while CleverCoin charges a 0.2% fee on these trades.
Although CleverCoin is not the first Bitcoin exchange to offer leveraged trading, as Bitfinex, OKCoin and several others have been offering this option for some time as well, all of these exchanges are located in Asia. Leveraged trading on a European exchange has therefore not been possible until now.
Speaking to Cointelegraph, CleverCoin CEO Karsten Nilsen said:
“A lot of European traders prefer to trade on a European exchange because it gives them a better sense of security. We are registered by the Dutch authorities, while fiat funds are held securely by LemonWay, a payment partner regulated by the European Central Bank. As such, CleverCoin is now the first fully compliant European exchange to offer this powerful way of trading.”
CleverCoin targets less tech-savy users rather than seasoned Bitcoin veterans. The exchange now hopes to be able to introduce these same relatively inexperienced users to a slightly more advanced trading option.
Nilsen added: “Boost trading perfectly adds to our vision to make trading bitcoins more accessible and understandable. A lot of our private beta testers loved the idea of boosting their trades but are just not familiar with trading terms like futures and swaps.”
“The exchange market is rapidly developing. The fastest growing exchanges are all offering leveraged trading. You see a growing demand for it all over the world.”
CleverCoin was founded in 2013, and opened its exchange for trading in September of 2014. It supports over 30 European countries.