Kraken Pro continues to enhance trader flexibility by adding 15 new collateral currencies for margin trading, increasing the total options from 23 to 38. This update empowers traders with more diverse assets to integrate into their strategies, improving liquidity and risk management.
What Is a Collateral Currency?
A collateral currency refers to any fiat, cryptocurrency, or stablecoin used to secure margin trades. Unlike spot trading, margin trading allows borrowing funds from Kraken to open leveraged positions (long or short).
Key features:
- Collateral doesn’t need to match the trading pair.
- Both unstaked and Kraken Rewards assets are eligible (excluding on-chain staking assets).
- Haircuts (value reductions) apply based on asset volatility.
👉 Discover margin trading strategies
Benefits of Expanded Collateral Options
- Diversification: Mitigate risk by spreading collateral across multiple assets (e.g., stablecoins + altcoins).
- Liquidity Optimization: Unlock funds for other trades while maintaining margin positions.
- Strategic Flexibility: Combine assets with varying haircuts (e.g., 5% for PAXG vs. 30% for PEPE) to tailor risk exposure.
- Short-Selling & Hedging: Capitalize on bearish trends or protect existing portfolios.
Newly Added Collateral Currencies
| Asset | Haircut |
|---------|---------|
| AAVE | 20% |
| DOGE | 20% |
| PAXG | 5% |
| XRP | 10% |
| ...(full list in original article)... |
Haircuts reduced for AVAX, XTZ & TRX (50% → 30%).
How Haircuts Work
Kraken applies a haircut to collateral values to buffer against volatility. Example:
- $1,000 DOGE (20% haircut) = $800 usable collateral
Important Considerations
- Collateral assets are locked while positions are open.
- Monitor availability via the Funding tab.
- Margin trading involves risk; review Kraken’s Margin Disclosure Statement.
FAQs
Q: Can I withdraw collateral during an active margin trade?
A: No. Collateral remains locked until the position is closed.
Q: Are staked assets eligible as collateral?
A: Only unstaked or Kraken Rewards assets qualify.
Q: How does leverage impact collateral requirements?
A: Higher leverage demands more collateral to maintain positions.
👉 Explore advanced margin techniques
Disclaimer: Trading on margin carries risks. Kraken does not guarantee market order execution prices or margin pool availability. Cryptocurrency markets are volatile; losses may exceed deposits. Tax obligations may apply. Geographic restrictions may exist.
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