What is Margex?
Margex is a cryptocurrency exchange registered in the Seychelles. It has been active since 2020.
On its website, Margex highlights the following factors as main advantages with its platform: privacy, secure trading and transparency. These factors are all important of course.
Margex has an affiliate program. Through this program, you can earn up to 40% commissions on Margex's trading fees generated from the futures and spot trading of your referrals. 40% is an attractive commission level relative to the industry standards. On the date of first wring this review (28 January 2021), Margex informed on its website that it had paid out 12 BTC (then corresponding to approx. USD 400,000) just in the month of January 2021.
You can sign up to the affiliate program here.
This exchange is a so called derivatives exchange, meaning that they focus on derivatives trading (no spot trading is available at this platform today). A derivative is an instrument priced based on the value of another asset (normally stocks, bonds, commodities etc). In the cryptocurrency world, derivatives accordingly derive its values from the prices of specific cryptocurrencies. You can engage in derivatives trading connected to the following trading pairs here: BTC/USD, ETH/USD, XRP/USD, EOS/USD, LTC/USD and YFI/USD.
Margex also offers leveraged trading to its users. They only offer perpetuals (i.e., futures without expiry dates), and no futures with expiry dates. The maximum leverage level for their perpetuals is 100x. A word of caution might be useful for someone contemplating leveraged trading. Leveraged trading can lead to massive returns but – on the contrary – also to equally massive losses.
For instance, let’s say that you have 100 USD in your trading account and you bet this amount on BTC going long (i.e., going up in value). If BTC then increases in value with 10%, you would have earned 10 USD. If you had used 100x leverage, your initial 100 USD position becomes a 10,000 USD position so you instead earn an extra 1,000 USD (990 USD more than if you had not leveraged your deal). However, the more leverage you use, the smaller the distance to your liquidation price becomes. This means that if the price of BTC moves in the opposite direction (goes down for this example), then it only needs to go down a very small percentage for you to lose the entire 100 USD you started with. Again, the more leverage you use, the smaller the opposite price movement needs to be for you to lose your investment. So, as you might imagine, the balance between risk and reward in leveraged deals is quite fine-tuned (there are no risk free profits).
Margex Trading View
Every trading platform has a trading view. The trading view is the part of the exchange’s website where you can see the price chart of a certain cryptocurrency and what its current price is. There are normally also buy and sell boxes, where you can place orders with respect to the relevant crypto, and, at most platforms, you will also be able to see the order history (i.e., previous transactions involving the relevant crypto). Everything in the same view on your desktop. There are of course also variations to what we have now described.
This is the trading view at Margex:
It is up to you – and only you – to decide if the above trading view is suitable to you. Finally, there are usually many different ways in which you can change the settings to tailor the trading view after your very own preferences.
Margex Trading fees
Every time you place an order, the exchange charges you a trading fee. The trading fee is normally a percentage of the value of the trade order. Many exchanges divide between takers and makers. Takers are the one who “take” an existing order from the order book. Makers are the ones who add orders to the order book, thereby making liquidity at the platform.
This platform doesn't have any spot trading, so the taker and maker fees we have listed in our database relates only to the contracts trading. Here, takers pay 0.06% and makers pay 0.019%.
According to the most extensive industry report ever prepared on contract trading average fees, the global average contracts trading taker fee and maker fee was 0.064% for takers and 0.014% for makers. Accordingly, Margex is quite close to average (a bit lower for takers and a bit higher for makers).
Margex Withdrawal fees
Withdrawal fees are usually fixed and vary from crypto-to-crypto. If you withdraw BTC, you pay a small amount of BTC for the withdrawal. If you withdraw ETH, you pay ETH. The last time we did an empirical study of the BTC-withdrawal fees in the crypto exchange market, we found that the average BTC-withdrawal fee was approx. 0.0006 BTC per BTC-withdrawal.
Margex charges 0.0005 BTC per BTC-withdrawal, which is below the global industry average and a quite competitive fee.
Deposit Methods and US-investors
This exchange has a so called “fiat on-ramp”, meaning that it is an exchange where you can purchase crypto derivatvies with regular cash. The method of fiat currency payment possible was previously just credit or debit card (not wire transfer), but as of 2 March 2021 and the collaboration with the company OpenMonet, wire transfers and PayPal transfers etc. are also permitted.
New crypto investors rarely start their crypto trading journey by investing in crypto derivatives, but they can theoretically do so. Accordingly, this exchange qualifies as an "entry-level exchange".
Why do so many exchanges not allow US citizens to open accounts with them? The answer has only three letters. S, E and C (the Securities Exchange Commission). The reason the SEC is so scary is because the US does not allow foreign companies to solicit US investors, unless those foreign companies are also registered in the US (with the SEC). If foreign companies solicit US investors anyway, the SEC can sue them. There are many examples of when the SEC has sued crypto exchanges, one of which being when they sued EtherDelta for operating an unregistered exchange. Another example was when they sued Bitfinex and claimed that the stablecoin Tether (USDT) was misleading investors. It is very likely that more cases will follow.
Margex does not allow US-investors on its exchange. So if you’re from the US and would like to engage in crypto trading, you will have to look elsewhere. Luckily for you, if you go to the Exchange List and use our exchange filters, you can sort the exchanges based on whether or not they accept US-investors.