Tiered Margin Rates: What They Are and Why They Matter
When dealing with tiered margin rates, a fee structure that lowers borrowing costs as your trading volume or margin balance grows. Also known as volume‑based margin pricing, it lets active traders pay less for leverage. It’s a core part of margin trading, trading with borrowed funds to amplify exposure on crypto exchanges, platforms where digital assets are bought, sold, and leveraged. The amount you can borrow is expressed as leverage, a multiplier that determines the size of your position relative to your collateral. In practice, a trader who keeps a high balance or executes many trades may move from a 0.15% daily fee to 0.08%, directly boosting net returns.
How Tiered Pricing Links to Liquidation and Risk Management
The main benefit of lower fees is offset by the increased risk that comes with higher leverage, which can trigger faster liquidation, the forced closing of positions when collateral falls below maintenance requirements. Effective risk management, strategies like stop‑loss orders and margin calls, are essential to keep these events in check. Tiered margin rates influence risk management because the cheaper borrowing cost encourages larger positions, which in turn raises the liquidation threshold. Platforms such as Saros Finance, DeDust, and MoonDex (highlighted in our article collection) each design their tier structures differently, impacting how traders balance fee savings against the probability of margin calls.
Understanding these dynamics helps you decide whether the fee savings outweigh the added exposure. You’ll find practical guidance on calculating break‑even points, comparing tier schedules across major exchanges, and tweaking position sizes to stay within safe limits. By the time you finish reading, you’ll know how tiered margin rates fit into the broader landscape of margin trading, leverage fees, and exchange selection, so you can pick the right platform and protect your capital. Below is a hand‑picked set of articles that dive deeper into exchange reviews, regulatory updates, and advanced trading tactics that all intersect with tiered pricing.
