To allow eToroX users to be able to use their money as they see fit, in the smartest possible way, and to boost our users’ trading power by providing them with additional liquidity, eToroX provides a credit line program for spot trading.
The credit line, as opposed to leverage trading, enables you to enhance your account liquidity, regardless of your trading positions. Practically speaking, this means that eToroX’s Credit Line program is a per user account option rather than per position, all the more exclusive by virtue of eToro being a regulated trading venue.
How it works is simple:
Make a deposit of a minimum of $10K.
Take a credit line of x5, and you have $50K to trade with.
The Credit Line program offers users an easier way to manage their positions, enabling them extended access to deep regulated liquidity. Based on the collateral of USD and other digital assets (See explanation about Margin Impact Parameter below), users can utilize eToroX’s line of credit, allowing them to trade with additional liquidity.
To review the Credit Line Agreement please click here.
To apply for the Credit Line program please contact us at [email protected]
How does the Margin Impact Parameter (MIP) work?
The Margin Impact Parameter (MIP) on eToroX is a value that applies to all assets.
- The value determines the extent to which the balance in a given asset will be evaluated as part of the portfolio balance for clients with a credit line.
- The MIP protects clients using the credit line against market risks associated with less frequently traded cryptoassets or those which have a smaller market cap than the more established asset classes.
The Margin Impact Parameter (MIP):
All supported digital assets available for trading on eToroX are assigned a Margin Impact Parameter (“MIP”). The MIP is a value between 0 and 1 which determines the extent to which an asset will be valued as part of the balance in your account, if you have opened a credit line on eToroX:
- If an asset class is denominated with an MIP of 1 (100%), the market value of the asset will be evaluated fully as part of your balance.
- If an asset is assigned an MIP of 0.5 (50%), only half the market value of the asset will be evaluated as part of your balance.
- Finally, if an asset is assigned an MIP of 0, the asset will not be evaluated as part of the balance. This means that the asset class cannot be purchased with funds borrowed using the credit line.
All MIPs are subject to change according to assessment by the eToroX Risk Management Team. Prior to any change in the MIP value of an asset class, the eToroX team will advertise the intended change to all clients using the credit line.
Why is the MIP Important?
The MIP protects clients utilizing the eToroX credit line against market risks associated with newly or historically volatile cryptoassets.
Trading cryptoassets with borrowed funds produces the equivalent exposure of a leveraged trade, as the USD value of your portfolio is continuously evaluated against the amount borrowed with the credit line.
To shield your portfolio against unexpected market risks and a subsequent margin call or portfolio liquidation, the MIP value of an asset class is a reflection of the risk assessment by eToroX’s Risk Management Team.
What are the MIPs for Cryptoassets today?
The MIPs for all assets traded on the eToroX Institutional Exchange are listed below and in the Exchange.