Margin trading is a trading approach that lets you borrow funds from an exchange like Huobi mondial to open positions larger than the balance of your account. While it’s regarded as a risky trading method, it has gained massive popularity as it offers a way to make significant profits with less capital.
But before borrowing funds from Huobi Global, you should know how much you must pay for your loan. This lesson will tell everything you need to know about interest rates for margin trading on Huobi Global.
You can also read the following lessons for more beginner margin trading knowledge:
How often is the interest rate calculated?
Huobi Global’s margin account interest rates are calculated on an hourly basis. So if the daily interest rate is 0.098%, the hourly interest rate is 0.0041% (0.098% ÷ 24). Even if you borrow funds for less than 1 hour, the exchange will still calculate the interest rate for 1 hour.
Interest rates may be adjusted from time to time but you can always see the current one under the ‘Loan’ banner.
For example, if you borrow 100 USDT at 8:33 AM and repay the loan at 9:02 AM, the interest rate is calculated by multiplying the borrowed amount by the hourly rate times hours borrowed: 100 x (0.098% ÷ 24) x 1 = 0.00408300 USDT.
If you repay the loan only after 9:33 AM, you would have to pay: 100 x (0.098% ÷ 24) x 2 = 0.008166 USDT.
When must I pay the interest?
You pay the interest simultaneously with the loan repayment. The loan repayment banner (see below) shows the accumulated interest, total borrowed amount, and the unpaid amount (everything you own in total).
Once you are ready to repay the loan and interest, click ‘All’ under the ‘Repay’ banner and confirm the repayment by clicking ‘Repay USDT’.
Note that if you have available point cards on your account, the system will automatically pay the interest using those points (1 pts = 1 USDT fee).
Conclusion
Remember to use risk management strategies and protection tools, such as stop-limit orders, to protect your investments when the market does not go your way. Before trading, you must fully understand all the risks of digital asset trading and be prudent in your own decisions.
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