Margin. How it works.

To start trading on Paxful it is essential to understand how to use margin to create attractive and profitable offers. Margin can be set only by offer owner and it is fixed once a trade starts. Offer owner or vendor can buy or sell bitcoins for more than 350 payment methods available on Paxful. 

Paxful provides an opportunity to set both positive and negative margin for each offer. 

Positive margin: 

Let's imagine you want to exchange your bitcoins for money directly. In this case, you create a sell offer for bank transfer. You decide that you want to earn 25% of the profit. In order to do so, you set a margin of 25%. As a result, a seller of bitcoins will get 125% of the transfer value.

For example, trade for 100 USD bank transfer takes place. So 100 USD is 125%.

The Bitcoin seller pays 100% to the buyer. Let's calculate how much is 100% from 125%:

100/125 = 0.8

This means that the buyer gets 0.8 USD worth of Bitcoin for every dollar of his bank transfer.

In other words, the buyer gets 80 USD worth of Bitcoin, the vendor gets the 100 USD transfer value and saves 20 USD Bitcoin value from this trade.

Please note: The escrow fee is always included in the total selling price. Escrow fee will be added to the margin percentage when a trade starts.

Negative margin: 

Let's say you want to create an offer to buy bitcoins for your gift cards. You decide to make your offer attractive to Bitcoin sellers and you are willing to set a negative margin of -5%.

This makes it 95% of the total selling price.

In an example of trade for 200 USD value gift card, the offer owner receives 190 USD of Bitcoin value. In this case, the seller will profit 10 USD per 200 USD or 5 USD per 100 USD.

100/95 = 1.05 USD per 1 dollar - Bitcoin seller’s profit.

Before choosing a margin for your offer, please consider margin limits set for specific payment groups.

It is strongly forbidden to set margin only for advertising purposes or use margin to mislead customers.

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