Leverage in virtual currency

1.

Leverage is a common financial transaction system, namely margin system

Leverage trading is also called virtual trading and deposit trading. That is to say, investors use their own funds as guarantee to enlarge the financing provided by banks or brokers to carry out foreign exchange transactions, that is, to enlarge the trading funds of investors. The proportion of financing is generally decided by banks or brokers. The larger the proportion of financing is, the less capital customers need to pay

leverage trading operation process:

1. Take BTC / usdt as an example, if the platform supports up to three times leverage

when judging that the price of bitcoin will rise from 10000 usdt to 20000 usdt, if you have 10000 usdt of principal, you can borrow up to 20000 usdt from the platform. Use 30000 usdt to buy 3btc at the price of 10000 usdt and sell it at the price of 20000 usdt, with a profit of 3btc * (20000-10000) = 30000 usdt

2. Take BTC / usdt as an example, if the platform supports up to 3 times leverage

when it is judged that the price of bitcoin will drop from 20000 usdt to 10000 usdt, with a principal of 10000 usdt (0.5btc), you can borrow 1btc from the platform, sell one bitcoin at 20000 usdt, and buy it at 10000 usdt, making a profit of 10000 usdt

if you only trade with your own funds, you can only buy low and sell high, not short

3. Calculation method of leverage lending rate:

from the time of applying for leverage, the interest will be calculated as 24 hours in less than 24 hours, and the loan funds and interest will be returned when the leverage is returned

4, the risk of leverage Trading:

leverage makes use of less capital to realize the possibility of obtaining greater returns. But if the wrong direction of the transaction is judged, the loss will also be enlarged year on year. Therefore, ordinary traders try to avoid the high leverage of heavy trading, to prevent the occurrence of burst positions or even through positions

(1) reasonable use of leverage ratio and control of position

(2) stop profit and loss timely and close positions spontaneously

(3) margin should be added in time to ensure that the ratio of total assets to leverage is greater than 110%

extended data

related functions of leverage Trading:

1. Loan account:

each loan transaction pair corresponds to a loan account. For example, ETH / BTC will correspond to an eth / BTC loan account (including two sub accounts of Eth and BTC)

users can transfer Eth and BTC monetary assets in the transaction account to eth / BTC lending account; Eth / BTC loan account can be applied for loan in two types of currency assets: Eth and BTC

2. Fund transfer:

users can't recharge to the loan account directly for the time being, so they can transfer the funds from the transaction account to the loan account by fund transfer

(1) when the user borrows, the part of the loan account with a risk rate higher than 200% can be transferred out to the transaction account

(2) when the user has no loan, all the available funds in the account can be transferred out to the transaction account

3. Apply for loan:

the user enters the loan management and selects the loan account to apply for loan assets. The amount of digital currency that the user can apply for loan depends on the account principal and platform leverage ratio. The maximum amount of loan that the user can apply for is net asset conversion (BTC) × Multiple - 1) - borrowed assets

for example, if the maximum leverage ratio of the platform is 3 times, the number of digital currencies that users can borrow is 2 times of the principal

2. The biggest difference between leveraged trading and spot trading is multiple
how to use leverage
1. Long (buy up)
here, take BTC / usdt leverage trading as an example (usdt vs. US dollar, 1 usdt = US dollar) to introce how to use bitcoin leverage. Assuming that the current price of bitcoin is US $10000, and you predict that the price will rise in the near future, you can choose to be long.
if you have only 10000 usdt principal and the platform is triple leverage, you can borrow another 20000 usdt from the trading platform, so the principal is now 30000 usdt; If it is 5 times leverage, it can borrow 40000 usdt, 10 times leverage is 90000 usdt... And so on
buy three bitcoins with 30000 usdt, sell them when they reach 20000 usdt, and get 60000 US dollars of bitcoin, dect 10000 principal and 20000 loan, and make a profit of 30000 US dollars
if you don't use leverage trading, you can only make a profit of 10000 usdt if you buy a bitcoin at 10000 usdt
of course, if the judgment is wrong, bitcoin will only lose 5000 usdt in currency trading and 15000 usdt in leverage trading
2. Short (buy down)
take BTC / usdt triple leverage trading as an example. At present, the price of bitcoin is 20000 usdt. If you think that the price of bitcoin will drop to 10000 usdt, and you have 10000 usdt in your hand, you can borrow one bitcoin from the platform (short can only borrow the currency you choose to short), and sell it when the price of bitcoin is 20000 usdt, Then, when the bitcoin price is 10000 usdt, buy it back to the platform, and you can make a profit of 10000 usdt
in fact, bitcoin leveraged trading plays a role in amplifying revenue, but it also magnifies risk

there are many digital currency trading platforms, and the main procts promoted by each platform are also different. Some are mainly spot trading, and some are futures trading. Among them, futures trading is contract trading, that is, leverage. The better platforms are coin stations, which can be seen by contract friends.

3. Anyone who knows about digital currency should know,

4. A lever is equivalent to a crowbar
you can pry heavy things with less force
in financial investment, leverage is equivalent to magnification
a leverage of 5 means that you can do business for 500 yuan with 100 yuan principal.

5.

Hello, I'm glad to answer your question:

School question:

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the problem of school cost:

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6. virtual currency should not be used as contract leverage, because only by doing contract and leverage can you expand your profit

7. The leverage ratio of different rec virtual currency investment platforms is also different. Generally, the leverage ratio is between several times and 100 times. Investors can choose flexibly according to their own situation. The use of leverage can enable investors to leverage a large amount of funds with a small cost and obtain high returns, which is the advantage of rec virtual currency. However, it is also necessary to make rational use of leverage, so as to better control the transaction risk and make the investment more stable.