In the bitcoin-sphere, Bitstamp is a household name. Bitstamp which is a UK based bitcoin exchange, is one of the major players when it comes buying and selling bitcoin. They have been around a long time as far as bitcoin goes, and have proved to be a reliable exchange, despite some ups and downs they’ve encountered in the past.
The exchange has grown much over the years, forming into a full blown exchange with different features such as limit orders, stop orders, an open order book, and so on. It’s more than a simple exchange or brokerage, but still lacks some features that super-advanced traders seek. Bitstamp is looking to change that with their newest adventure.
In a tweet from Nejc Kodrič, CEO of Bitstamp, he said that Bitstamp is working on getting regulatory approval for leveraged trading. This shouldn’t be too much of a surprise as it’s a logical step toward making Bitstamp a well rounded exchange with all major features that bitcoin traders and investors use.
Leverage in general terms simply means borrowed funds. Leverage can be used to trade financial assets such as bitcoin. Leverage is often used in forex trading to trade one currency, such as the US Dollar (USD), to another currency, such as Bitcoin (BTC). According to Investopedia, they explain leverage as:
The use of leverage in trading is often likened to a double-edged sword, since it magnifies gainsand losses. This is more so in the case of forex trading, where high degrees of leverage are the norm.
Leveraged trading isn’t for the faint of heart. To put it mildly, it’s a risky endeavor. However, many bitcoin traders use it to realize maximum profits. Several bitcoin exchanges already offer leveraged trading such as Bitfinex, OKCoin, and Kraken.