Let’s explore what is ETF Product and how to use it in crypto trading. It’s time to find difference between ETF and Margin.
Similarity between ETFs and Margin
ETFs and Margin Trading can amplify the price changes of Spots according to a certain multiple.
The differences between ETFs and Margin are:
- Compared to Margin trading, ETF trading is more convenient, the cost is lower, there is no need to pay for margin, there is no liquidation risk, and the capital utilization rate is higher. It can generate compound interest under a unilateral market, and the profitability is better than Spots and Margin Trading.
| ETF | Margin Trading | |
| Price | Opens at 1U and tracks the price changes of the underlying asset | Consistent with spot price |
| Compound Interest | Compound interest generated by unilateral market | Fixed leverage multiple, no compound interest |
| Liquidation Risks | No liquidation risks | Liquidation is triggered when the account risk rate is ≤ 105% |
| Margin | No margin required | Requires margin |
| Trading Method | For spot trading, buy “L” to go long, buy “S” to go short, and sell to close the position | If you need to borrow or return USDT or the corresponding currency, “Buy” refers to going long and “Sell” refers to going short |
| Fees | Trading fee 0.2% + 0.001% management fee per multiple | Trading fee 0.2% + cryptocurrency borrowing interest |
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