Step by Step Guide to Margin Trade on Nuo

So you are currently HODLing a few cryptocurrencies and are wondering what else you can do with it? Well, you’re in luck because there are numerous ways on how you can grow those cryptos locked in your pocket.

Unlike the traditional banking system, where you are depended on banking entities for your money to grow, with Cryptocurrencies you can pretty do it own your own. In Decentralized Finance, you can mainly grow your cryptocurrencies through Lending or Margin Trading. At Nuo, you can enjoy both the features simultaneously.

We enable a DIY kind of experience to our users who wish to Margin Trade at Nuo. Let’s have a look at how to go about it:

Step 1: Select Trade Position and Leverage

• Market: It is necessary to evaluate with which market you would want to place your trade in, we have developed the Margin Trade function with favoring the four major markets-
  DAI, USDC, ETH, and WBTC, with each having 10 pairs of ERC20 tokens. Nuo provides liquidity in these markets via Kyber and Uniswap exchanges.

In this trading journey example, we will be trading in the USDC market.

• Positions: A Position in Margin Trade means in which status you would like to place your trade with. Nuo facilitates users to hold both positions — Long Position and Short Position — with up to 3x leverage
  A long position is a trade position where the trader expects the underlying Crypto asset to appreciate. For example, when a trader executes a buy order, they hold a long position in the underlying instrument they bought i.e. ETH/USDC. Here they are expecting the ETH to appreciate against the USDC.
  A short position is essentially the opposite of a long position. When a trader enters a short position, he expects the price of the underlying crypto asset to depreciate.

For this trade, I will be going Short on ETH because I am betting on ETH prices to go down.

• Borrow APR: Borrow APR is the premium to be paid annually on the token that is being borrowed to fulfill the trade. It varies based on the liquidity and the prevalent supply and demand of the borrowed token. The premium or total interest that you will pay on the loan or margin trade is displayed in the prompts before you confirm the loan. The premium listed in the confirmation prompt is the interest that you will pay regardless of whether you repay your loan early.

Borrow APR is performed on my loan amount, in this instance, the rate is at 2.2%

• Leverage: Leverage is a strategy to use loaned funds to boost the return on investment. If the yield on the full amount spent in the cryptocurrency (your margin deposit plus borrowed funds) is greater than the interest you pay on the borrowed funds, you can create important profits.

At Nuo, you can leverage your trade up to 3x, here too we are placing the trade at 3x leverage

• Entry/Exit: The entry price is the current price of the position token, while the exit price is the price of your position currency at which your trade will get liquidated, assuming the market currency price and margin deposit currency price remains unchanged, stop loss is at 80%, trade duration is 30 days and margin deposit is 1 ETH. The exit price is dynamic in nature, so it’ll vary depending on the values you’ve entered for your trade.
  You can see the entry price and exit price on the graph, and it would be accessible to you while you place your trade.

Step 2: Trade Amount and Closing Parameters

• Margin Deposit: All trades on the platform require a margin deposit to cover for any potential loss accrued. Users can put up this margin deposit in any currency that Nuo supports. This amount will also determine the final trade amount depending on the leverage chosen.

For this Trade, I am putting up 43 DAI as a margin deposit and selecting USDC as my closing trade currency(the currency in which I will get my profits).

• Duration: Every trade has a duration which can be set by the trader, the preset days we recommend at 7 days, 14 days and 28 days. This duration signifies when your trade will get auto-liquidated. You can manually stop the trade at any time within this duration as well.

Setting the duration for 28 days.

• Stop-loss/take profit: Because the cryptocurrency prices keep on fluctuating, it is necessary to limit your trade in terms of loss and gains.
  If your margin trade hits its stop-loss percent,i.e, that much percent of your deposit, then your margin trade will be automatically margin called and the losses incurred will be taken out of your remaining margin deposit before being returned to your Nuo Account Balance.
  If your margin trade hits its take profit target, the gains earned on the trade will be added to your Nuo Account Balance along with all of your margin deposit.

I am placing the Stop Loss and Take Profit at 50% each.

• Interest Premium: It’s a preset value provided by the Nuo platform depending on the duration of the trade set by the user.
  For every token pair, the premium is decided on the loan amount that is borrowed.

Interest Premium is set at $1.02

• Liquidation buffer: It’s a preset percent defined by the platform based on the crypto asset you place in the Margin Deposit, Position token and Market currency. This is the buffer added to your stop-loss to counter a potential slippage.

Liquidation buffer is set at 10%

• Fee: This is the trade fee which is used for relaying your signed transactions across multiple exchanges. This fee is capped at 0.035 ETH worth of your borrowing currency.

The trade fee is at 0.5%

Step 3: View the past performance of this trade

• Graph: Before I place the trade, I would look at the past performance of the Cryptocurrency, it helps in stimulating the trade based on market performance and whether it amounts to how much ever profit or loss. Purpose of the graph is to help the trader to make a more calculated and informed trade. You could even simulate the trade result by hovering over the graph wrt timelines

• Entry/Exit: The entry and exit price as seen on the graph is the denotes price I would’ve received if I had entered the trade at the time and the exit price is the price what I would’ve left with after ending the trade

Step 4: Confirm real-time prices and sign the order

• Partner exchanges: To provide instant liquidity we have partnered with several Decentralized and Centralized exchanged like Kyber Uniswap etc
• Signing the transaction: Just before placing the trade, you’re able to see the necessary details of your trade, including rates of your final Liquidation Price, Entry Price, Exit Price and Trade Amount. You would also be able to see where Nuo was able to get the best prices. These prices may change a little bit due to slippage.

Here, for my trade, Nuo is able to fetch the best prices for my trade. Here, the Entry Price at 179.42 USDC, Liquidation Price at 156.98 USDC and Trade Amount at 0.688 ETH

• Price feed: This margin trade will be placed on partner exchanges by fetching the best price in real-time. Nuo uses the best price provided by DEXs and hard-fences it using the weighted average price from centralized exchanges.

For the trade, Nuo is placing the trade on Uniswap

Step 5: Track your order & stop anytime

• Trade Summary: All trades on the platform require a margin deposit to cover for any potential loss accrued. Users can put up this margin deposit in any currency that Nuo supports.

Here, I can view all the trades I have placed in the past

• Trade graph: Upon selecting your trade, you will be able to see how the trade is performing in the illustrated graph.

• Gains: You would be able to see the profits you have achieved on your Trade. This Gain is an estimated figure after deducting interest payments of 0.96% on the loan amount, excluding the trade liquidation fee and a potential additional slippage of -0.60% on a liquidation.

As illustrated, I have benefited from my margin trade, I have received 7.43 USDC

• Stop Trade: Upon Stopping the trade, your order closes and in case of profits, the amount gets deposited in the Nuo account

• Slippage: On stopping the trade, you would’ve noticed that the Gains displayed in the Trade profile differs the amount that you end up receiving. This happens because of Slippage.
  The Cryptocurrency markets have high volatility, which means that market liquidity is low and prices are fluctuating very quickly. It occurs when a trader must settle for a different rate than expected, between the period they enter the market and the actual trade execution.

So, this was the entire Margin trade journey on Nuo. Our goal has always been to provide the best user experience and to make the platform as instinctive as possible.

We understand, that there are several questions that you will have in your experience of trading at Nuo, so we have compiled a list of most frequently asked questions.

Check them out here — https://help.nuo.network/category/getting-started/