Bitpanda Leverage: A New Feature to Trade Crypto in All Market Conditions

Austrian fintech unicorn Bitpanda has launched a range of leverage trading products, to give investors more choice in how they trade. The new leverage products have been available to a limited number of Bitpanda customers since late last year, and are now being offered to all Bitpanda traders. Bitpanda Leverage is a new way for investors to trade on a short term horizon, regardless of market sentiment, with low trading fees.

Bitpanda Leverage currently offers more than ten leverage positions on some of the world’s best known cryptocurrencies. The performance of Long funds is double that of the underlying crypto asset, while the performance of Short funds is the inverse of the underlying asset.

Eric Demuth, CEO of Bitpanda, commented: “We want to give our users choice when it comes to how they invest. Yes, CFDs have a much greater risk reward ratio, but they are a valuable tool for people who want to capitalise on short term market sentiment.”

How Does It Work?

Bitpanda Leverage is a CFD (Contract for Difference) which considers the issue of margin call obligations for our customers. All Bitpanda Leverage products contain a margin close out control with a trigger of 50% of the initial margin automatically – this cannot be disabled. This means that a position will be automatically closed if a 50% loss has been incurred. A negative balance control ensures that potential losses of any position are capped at the original amount invested into Bitpanda Leverage.

CFDs are a product that acts as an agreement between an investor and a broker, in this case, Bitpanda. CFDs give investors the chance to potentially profit from price movement of a specified cryptocurrency without owning the underlying asset. CFDs can provide access to an underlying asset with the option to go long or short, but they also come with significant risk of losses.

While investors cannot lose more than they initially invest in Bitpanda Leverage, CFDs are a complex financial instrument and come with a great risk of losing money. CFDs are not suitable for buy and hold trading. They require constant monitoring over a short period of time. Even maintaining your investment overnight exposes you to greater risk and additional costs. Immediate action may be required to manage risk exposure.