Most of you are familiar with leverage trading on binance. You have to transfer your spot holdings to your future account and that is your collateral/margin.
For each trade you would set the leverage (X amount) accordingly to your risk management and trade setup). This is a nice way of trading leverage.
However, for some users FTX might be better here. I’ll tell you why.
So let’s say you HODL some BTC, ETH, LINK or another altcoin. They just sit in your wallet or exchange as you might regularly swingtrade them. They can be slow movers sometimes…
If it was Binance, and you want to trade leverage you would have to transfer USDT or USDC to your futures account.
Now imagine you have those holdings on FTX and you want to trade separate positions with leverage…
You don’t have to transfer anything! Your holdings + USD is your collateral! You just set your account leverage (I recommend x5) and start trading futures. This way you can HODL your coins and at the same time trade on future contracts, just now you have way more buying power as you effectively use your spots as collateral.
Don’t forget risk management, liquidations are not wanted - since your spot holdings are at risk too!