Real Secrets About Margin Trading

The Bitcoin Code Traders are always dedicated to buying stocks. In general, there are two basic methods by which a trader can purchase their required stocks. One way is by getting the stock by paying the stock price fully and the other one is through a margin account, which is our prime concern.

Definition of Margin Trading

By employing a margin account for purchasing the share, the buyer tends to a pay only a portion of the whole rate and the associated broker, also known as the margin provider lends the rest of the money. In return for this help, the buyer promises to pay pre-specified interest on the broker’s loan in addition to the usual commission fees. For security, the broker holds on to the stocks. Bonuses earned from these stocks are used to help counter the payment interests. Thus, margin trading can be better defined as a leverage means of the transaction whereby the nominee pays for the stock using his own money borrowed from the broker.

Relation with short sales

When used with short selling, the margin trading requires its investors to have both initial and maintenance margin.

  • Initial margin comprises at least 50 percent and is different among countries, which further means, the investors can borrow mainly up to 50 percent of the stock value. Thus, it can be concluded that the lower the value of margin requirement, the more the investor can borrow.
  • Further, for the maintenance margin, the minimum value comes down to at least 25 percentages for any purchases made and to protect the broker against the abrupt stock price declines. Or else, if the margin value falls below the maintenance margin, the investor will frequently receive calls or get a notice from the concerned broker to append additional sum to their respective margin account. In common, the brokers grant a time of 3 to 5 days for adding up margin after a margin call has been received by the investor and if the call criteria fail to be met, the broker takes the stock to sell it to another one to pay off the loan.

Major Pros of Margin Trading

  • Professional and Experienced investors who are well studied of the trend patterns of a stock market surely can earn a huge profit with merely less investment.
  • Moreover, they can really exploit the chance of increased buying power with less money.
  • Suitable for day traders, who need to achieve more trading numbers with a relatively high volume of stocks.

 

 

Why Are Bitcoins still so popular?

There have been so many new cryptocurrencies in the market. An ICO or initial coin offering is where a new venture shares a few of its crypto assets to the traders and thus earn money to boost their venture. This is the first step that marks the birth of a crypto currency. And then people who buy this currency, the way the venture performs in the market, would all determine the growth of the currency. It would determine whether the token issued still remains a token that can be used in limited ways or whether it grows to become a widely accepted currency.

Bitcoin – the pioneer in crypto currency systems

When we talk about crypto currencies most people still can think only about bitcoins. There has been a lot that has changed. But in the beginning, it was just bitcoin and a bunch of optimistic traders. There are now trading bots like Crypto Code and others that can allow users to trade directly with crypto currencies of their choice. Click here to get into the details about this crypto trading bot and how it helps you trade better.

Bitcoin is still a good bet

Some have the wrong notion that bitcoin has already reached its zenith and that there is very little room for growth. We can say that the mindboggling amount of growth it showed in the past few years might actually have slowed down. But that doesn’t mean that the currency is not going to grow further. The value of the currency now is several times higher than the value it held when it was introduced. It has been the most preferred crypto currency. There are still several differences between bitcoin and other currencies.

  • Bitcoins can be used in several places- this is, in fact, the most widely accepted currency for transactions.
  • Bitcoin mining has now expanded and there are various ways in which people do it. Sophisticated mining tools are also available. So if you are someone who feels that mining is going to be difficult then you would be able to use any of these readily available tools.
  • There have been ups and downs in this coins. There are even instances where the coin’s drop in value shocked the investors. But the coin has somehow managed to recover and reclaim its position. So the investors are confident about buying this currency which can withstand a few crashes in the market.

 

How to choose a cryptocurrency exchange

There are so many factors to keep in mind when you plan to trade in cryptocurrencies. One of the prime aspects is the choice of the cryptocurrency exchange. The number of cryptocurrency exchanges is increasing fast. The exchange you choose has a major role to play because the reliability of the exchange is crucial. And you should also ensure that you choose one that is resilient to attack by hackers. This would thus help minimize your risks and increase your profits.

For the passive traders who simply like to invest in cryptocurrencies but do not care to delve deeper, there are crypto trading bots like Crypto Code and others. It is also easy to find out more about these bots from the many sources on the internet.

For the traders who are struggling to make a decision in choosing a cryptocurrency exchange, here are few things to consider-

  • Transaction methods

Buying and selling the cryptocurrencies should be easy in the chosen system. The modes of payments accepted would be a factor to look into. There are some exchanges that only allow payments with cryptocurrencies. These are not suitable who are starting crypto trading for the first time where the purchase would happen with FIAT currencies.

  • Security measures

How easily a hacker taps into the system would determine how easy it would be for you to lose your money. Such cyber attacks can be avoided if the system is secure. So it is wise to choose a cryptocurrency exchange that comes with reliable authentication procedures.

  • The coins and tokens you can trade

The number of tokens supported would vary with each cryptocurrency exchange. If you wish to expand your trading strategy and diversify your portfolio you would definitely need an exchange that supports multiple tokens.

  • Ease of use

When we talk about the ease of use it includes the user interface as well as the purchase options. There are some exchanges that even offer complimentary free tokens. This would just be an added perk that is good to have. Otherwise, an exchange that offers an interface that even the beginners would be able to use would help save a lot of time. So order execution can take place in just a few steps.

  • The fee to be paid

Finally, the fee paid does matter because everyone trades cryptocurrencies to make some profits after all. The rates might vary, but finding one that justifies the rate with the features it offers would be a good choice.

 

What Is Capital Market And How Is It Different From Money Market

Capital Market

It is the market where long-term funds such as securities issues of government and business are traded between demanders and suppliers through securities exchanges.         The main securities traded are bonds and stocks. Bonds are long-term debt securities issued to raise funds across various sections of investors. Stocks include both common stocks and preferred stocks offered as equity or ownership rights.

Bonds issued by businesses known as corporate bonds follow a semi-annual mode of interest payment to the investors at a predefined coupon interest rate.

When an investor purchases a common stock, he gets an equal unit of ownership in the company. The stockholders get their returns from the company or corporation in the form of dividends as per the dividend policy of the issuer. The key is that the share price should increase and thereby the cash flow.

Preferred stocks get priority in the payments over common stocks and the stakeholders of preferred stocks get dividend periodically prior to the common stockholders.

Bonds are issued for a large span of time, for example, 20 or 30 years and have a face value at the time of initial maturity.

Both are markets and both of them deal with money. Then, how are they different? Money Market and Capital Market are different in terms of the type of money involved, the purpose of money-handling, the securities rotating, mode of operation and the duration.

 

Vs Money Market

The money under limelight here are the funds operated through short-term financing. These include bank loans, debt finances, commercial papers, US treasury bills, certificates of deposits etc. Unlike capital market, the debt securities in money market have a maturity period of one year or lesser and are offered by a lot of variety of businesses, governments, agencies, financial institutions, individuals etc.

While traders use capital market for long-term funding, they enter money market to make some quick money or temporary funding as well as to extract some interest or earnings on currently idle funds. These debt-funding instruments do not give any ownership rights to the buyer.

The operation of the money market is carried out either through stock brokerage firms or directly between sellers and purchasers in rapid transactions. Since the rotation rate is faster than the capital market, it is easier to identify any frauds like Crypto Code scam, whereas the long maturity years of capital market securities do not show this trend.

Both the markets allow securities to be resold before the maturity period, with different terms and conditions and value change.

 

5 Habits To Attain Financial Freedom

Although this technologically growing 2018 might provide you with too many opportunities to grow your income to attain the much-needed financial freedom, not without following these 5 habits the desired result is achievable and therefore, do start practicing them from right today to soon achieve the financial freedom, satisfactorily!

  • Say ‘No’ To Joneses

Competing and comparing with our neighbors and friends are two things we have to completely avoid if financial freedom is the desire. It’s because when we do so we unnecessarily spend on things that are of no use to us in any way! Remember, live to please yourself and not to attract others or satisfy others unnecessarily, which will help you spend cautiously and lead you gradually towards the path of financial freedom!

  • Save first spend next

It doesn’t matter how much you earn as long as you save so much out of it. Yes, make it a practice to allocate resources for your savings and only then start thinking about spending on various other things to satisfy your trivial needs, as this can help you abundantly in securing and growing your money to achieve the desirous financial freedom!

  • Keep investing

Saving doesn’t mean securing your money in the cupboard; it means you have to invest it in the right ways to ensure it is both secured and growing to offer you the much-needed financial freedom. If you are looking for suggestions, try investing in the latest cryptocurrency investment practice, as it not only seems futuristic but also seems uncomplicated due to the availability of automated crypto investment platforms like the Crypt VIP Club that can appropriately benefit even the beginners, beyond any doubt!

  • Restrict Consumer Debt

It is indeed cool to make your purchases and payments using the credit card but, not so cool when you keep on adding to your debts by failing to make your payments on time. Not only credit-card balances, even car-loans and other consumer debts are threats to your financial freedom, as they provide an opportunity for the relevant financial institutions to grow their money while yours keep on diminishing, unfortunately. Hence stay away from these consumer debts by repaying them on time or if possible pay-off them sooner to boost your financial situation and attain the exciting financial freedom.

  • Maintain a journal

Always maintain a journal of your spending to ensure you are spending only on things that are necessary and relevant to you. By this way, not only your money is saved, you are also making the significant step towards the fabulous financial freedom, undoubtedly!