Gate Exchange has taken a significant step by expanding its offerings in the traditional finance (TradFi) sector. The platform has introduced access to contracts for difference (CFDs) on various traditional financial instruments including gold, currencies (Forex), stock indices, commodities, and well-known stocks. This development was recently communicated to Incrypted by company representatives.
The new CFD trading capabilities are integrated into the Gate App and the MetaTrader 5 (MT5) platform, marking a strategic move by Gate to extend its reach beyond the cryptocurrency market. This initiative aims to create a unified trading environment that combines both crypto assets and traditional financial instruments.
Gate”s TradFi contracts utilize an internal unit called USDx for margin and settlement purposes. USDx is not classified as a fiat currency or a cryptocurrency; rather, it serves as an internal accounting unit that is pegged to USDT at a 1:1 ratio. Once users transfer USDT to a TradFi account, their balance is displayed in USDx. The company assures users that this system is fully backed by USDT, eliminating the need for manual conversions and preventing any additional fees related to currency exchange or storage.
In terms of trading mechanics, it is crucial to note that Gate”s TradFi contracts are distinct from the perpetual futures commonly associated with cryptocurrency trading. These contracts adhere to the conventions of traditional financial markets, characterized by fixed trading sessions and designated market closing periods. Furthermore, leverage settings are fixed and cannot be altered by users. The margin system operates on a cross-margin model, allowing for hedging of long and short positions based on the volume of trades. Profits and losses are computed according to counterparty prices, and an overnight financing fee applies during market closings, consistent with traditional CFD market practices.
Gate”s TradFi contracts provide substantial leverage opportunities, supporting up to 500x for core products such as the currency markets and stock indices. For stock CFDs, leverage is capped at 5x. Additionally, the platform offers competitive commission rates that can start as low as $0.018, ensuring a transparent trading cost structure for users.
On the risk management front, Gate”s TradFi services are powered by the MT5 trading platform, where account data and transaction histories are synchronized between the Gate app and the MT5 client. The platform employs a forced liquidation mechanism dependent on the margin ratio. If the account margin level drops to 50% or lower, the system triggers a forced position closure process, systematically reducing positions in line with predefined risk management protocols.
The company believes that the expansion of its TradFi offerings will democratize access to traditional financial assets for its users. This move not only facilitates risk hedging but also streamlines trading decisions within a single platform. Additionally, the product structure aims to simplify inter-exchange operations, reflecting a broader trend of cryptocurrency platforms adopting more sophisticated financial market rules into their product frameworks.
As the lines separating cryptocurrency from traditional finance continue to blur, there is an anticipated increase in demand for multi-asset and cross-market trading solutions. Gate Exchange”s launch of its TradFi offerings represents a pivotal advancement in its integrated trading infrastructure, demonstrating the potential for harmonizing diverse asset classes within a regulated framework.
It is essential for users to note that Gate may impose restrictions or prohibitions on the use of its services in certain jurisdictions. For further details, users are encouraged to consult the User Agreement.
