Bitfinex Margin Funding Depth Chart to the Rescue [PDF]
In this short blogpost I want to outline the importance of the margin funding depth chart. You can use it not only as a margin funding rate trend indicator (read my previous blogpost for details), but also as a tool for scoping interest rate in a down trending market.
Margin funding bids
When making investment decision you should not forget to look at the margin funding bid table. In fact, in many cases, there you will find the answers to your doubts about choosing interest rate for your margin funding offers.
You may have already noticed that almost all margin funding offers are short-term, and therefore long-term bids are executed quite rare. So as a result, those long-term bids stay in the margin funding bid table waiting for someone to execute them. And guess who are they waiting for? Yes! They are waiting for you!
In the down trending market conditions long-term bids usually have a higher interest rate than offers, so why not use them? I've also noticed that many of such long-term bids, when executed, remain in your margin funding portfolio for the entire term, thus making them a good tool for interest rate scoping. And in addition, the execution of the chosen bid is instant.
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So to recap, in a down trending market, you have all the set of pros of choosing a bid from the margin funding bid table:
- Higher interest rate than in margin funding offers,
- Interest rate scoping for a long-term,
- Instant execution.
In certain cases it will be up to you to decide whether you will place your margin funding offer at your chosen period and interest rate, or instantly execute someone's bid. Both options can be good, but one of them may be a bit better.
And as always, do not forget to leave your comment with your opinion whether this quick tip was helpful for you or any suggestions of how to improve it.