In financial trading, the use of leverage can increase your potential profit as well as loss risk. Leverage trading is a derivative financial instrument of financial trading. Bexplus users can enlarge their tradable assets with 100x leverage on the platform, and thus enjoy more profit on investment. But they have to bear the correspondingly high risk at the meantime.
First, what is leverage trading?
Leverage trading, also known as margin trading, is a facility offered by Bexplus, that allows traders to maximize the value of their trades. One can open a position much larger than his or her own capital would otherwise allow. It can increase the trader's profits, but it can also increase his or her loss risk too.
"Leverage" refers to the ratio between the position value and the investment needed. Bexplus offers the leverage of 100:1 to its users. Assume that you are placing a trade for 0.001 BTC($20), if you use leverage of 100:1, this multiplies your trade 100 times. That means 0.001x100=1, your trade is now worth 1 BTC($2,000).
Margin is invovled in leverage trading, which is referred to as the actual amount to create the leverage. For example, with 1:100 leverage you can control 1 BTC of an asset with only 0.001 BTC in margin. Margin trading is to enter larger trade with small amount of BTC investing in, in a bid to multiply the profit. But at the meantime, you have to take multiplied risk of loss.
Since Bitcoin has huge price fluctuations, you ought to have a full understanding of the risk of leverage trading before you trade it.
Second, when the price of BTC is expected to rise/fall, how to maximize profit with 100x leverage trading?
Take BTC/USDT as an example, Bexplus offers 100 times leverage to traders. That is, if you buy up/down, you can get 100% profit with 1% price rising/decreasing.
You can gain profits no matter the price goes up or down.
Third, what is the pros and cons of leverage trading?
Leverage makes it possible to gain larger profit with small capital. But if you bet on the wrong direction, the loss will also be magnified in equal proportion. Thus, traders ought to be aware of the risks and control positions well.
Fourth, how to lower the risk of leverage trading?
a. Appropriately take advantage of leverage, and control position sizes.
b. Timely stop loss and take profit, and spontaneously close the position.
c. Timely add margin to ensure the ratio of total assets/leverage limit exceeds 110%.
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