Margin trading carries a high level of risk and may not be suitable for all investors. Financial leverage can work against you as well as for you. Before deciding to trade, you should carefully consider your investment objectives, level of experience, and risk appetite. You may sustain a loss of some or all of your invested capital; do not invest money you cannot afford to lose.
Margin Trading on Stocks, ETFs and ETCs includes risk management features such as risk indicators, margin calls, estimated liquidation prices, direct repayment and limit-to market order in the form of take profit or stop loss orders. These features help you monitor and manage your position.
Your margin level shows how well an individual margin position is covered by its current value. It is calculated separately for each Stock, ETF or ETC margin trade, meaning it is isolated per position. Your other Bitpanda account balances or other positions are not included in this calculation.
In simple terms:
More specifically:
The current EUR position value is based on the mid price from the relevant Trading Venue during its trading hours. The amount you owe includes the outstanding borrowed EURCV amount and any accrued Daily Fees for that specific margin trade.
You must keep your margin level above the Liquidation Threshold for the relevant Stock, ETF or ETC. The Liquidation Threshold is the minimum margin level required for that asset. Your margin level can decrease if the price of the Stock, ETF or ETC falls, because the current value of your position goes down. It can also decrease over time as Daily Fees accrue, because the amount you owe increases.
The app may show colour-coded risk indicators for your position.
A margin call is a warning that your position is approaching the liquidation price. Bitpanda will use reasonable efforts to notify you, for example by push notification or email, before the position reaches the threshold.
Margin call thresholds are set transparently asset per asset and can be discovered here.
The amount you can borrow for a new leveraged trade depends on your available balance of e-money (fiat), crypto assets, Stocks/ETFs/ETCs assets and on Bitpanda risk checks. These checks are designed to help ensure that your account has enough available funds or eligible assets to support your open leveraged positions, especially because prices can move sharply when markets are closed.
- You already have open leveraged positions and thus pledged e-money, crypto assets or Stocks/ETFs/ETCs to Bitpanda GmbH. Thus, some of your funds or assets are reserved as collateral.
- The market value of your stock, ETF or ETC is close to reaching the liquidation price.
- Market movements have increased the risk of your portfolio.
- You have outstanding debt from another leverage position.
- The trade amount or leverage you selected is too high.
To increase the amount available to borrow, you can deposit more funds that can serve as additional collateral, reduce the trade amount, choose lower leverage, repay outstanding debt, or reduce or close existing leveraged positions by repaying them, depending on your situation.
Possible reasons include:
- The selected asset is not available or no longer available for Margin Trading.
- Trading is currently unavailable for the asset.
- You are not eligible due to country, account type, regulatory requirements or account status.
- You have insufficient fiat balance.
- Your available amount to borrow is too low.
- The trade amount or resulting position is too large for the asset.
- You have outstanding debt from another leverage position.
- Your account is currently restricted from actions that increase risk.
- The feature is temporarily unavailable or the asset is disabled for trading.
The app will usually show the relevant error or next step, such as reducing the amount, choosing lower leverage, depositing funds, or repaying debt.
The liquidation price is the estimated price at which your leveraged position would reach the liquidation threshold.
Your position has a margin level, which compares the current value of the stock, ETF or ETC with the amount you owe, including borrowed EURCV and accrued daily borrowing fees. If the margin level reaches the liquidation threshold, the Liquidation Order you placed when opening the position may be triggered.
The liquidation price shown in the app is based on factors such as:
- The current value of your stock, ETF or ETC.
- The amount of EURCV you borrowed.
- Accrued daily borrowing fees.
- The liquidation threshold set for the specific asset (find the liquidation thresholds for each asset here).
Your liquidation price can change over time. It may move closer to the current market price if the asset price moves against you or if daily fees accrue. It can also change if you increase, reduce or repay part of your position.
When you open a leveraged position in a stock, ETF or ETC, you instruct a Liquidation Order. If the value of your stock, ETF or ETC reaches the liquidation threshold, the Liquidation Order may be triggered, resulting in a sell order. This will close the position and repay the borrowed EURCV and accrued daily borrowing fees.
Your position reaches the liquidation threshold when its margin level becomes too low. This can happen if the price of the stock, ETF or ETC moves against you, or if daily borrowing fees accrue over time.
If the Liquidation Order is triggered and executed, the stock, ETF or ETC is sold. The proceeds after tax (if applicable) are used to repay the borrowed EURCV, accrued daily fees and applicable fees. If the proceeds are not enough, you may still owe borrowed funds to Bitpanda GmbH.
Stocks, ETFs and ETCs are not traded 24/7. This creates two different time concepts: trading hours and liquidation execution windows.
Opening, increasing, reducing and closing a position, thus selling stock, ETF or ETC generally requires trading to be available through the trading venue. Trades are executed at our partner stock exchange and the current trading window is Monday to Friday, 07:30-23:00 CET, excluding relevant holidays and market closures.
Liquidation order execution windowsLiquidation Orders for Stocks, ETFs and ETCs are restricted to the relevant reference market window for the asset. Each asset is mapped to a reference market schedule used for liquidation execution.
Current liquidation order execution windows are:
The app remains the source of truth for whether a specific action is currently available.
If your position reaches the liquidation price outside of the liquidation order execution window, your position remains open and daily borrowing fees continue to accrue. A margin call notification is issued to inform you about your position health.
The value of your Stock, ETF or ETC may improve or worsen before the liquidation order execution window opens. If the asset opens at a much lower price, the final execution price may be below the liquidation price shown earlier in the app. This can create debt if the sale proceeds are not enough to cover full repayment of the borrowed EURCV and fees.
You can flexibly manage your position to reduce risk or sell your stock, ETF or ETC manually and avoid that the liquidation order is executed during the liquidation order execution window.
You can:
- Repay part of your borrowed EURCV through direct repayment.
- Sell your stock, ETF, ETC and repay borrowed funds during trading hours (close position).
- Provide additional collateral in the form of stock, ETF or ETC by buying additional assets and pledging them (Add to your positions with 1x).
- Choose lower leverage when opening or adding to a position.
- Use take limit-to market order in the form of profit or stop loss orders where available, while understanding that execution is not guaranteed at the target price.
- Pay attention to margin calls, risk indicators and market-closed risk.
If you hold open margin positions, part of your account value may be pledged as collateral. This can reduce the amount available for withdrawals, crypto transfers, fiat sends or card transactions. You may be able to increase your available amount to withdraw by repaying borrowed EURCV, reducing or closing positions, depositing funds, or repaying outstanding debt.