『About Short Selling Contracts Explained』

I often see many beginners in the square: shorting 100x to zero and then getting rich

This is a very serious misconception 🙅

The leverage multiplier only allows you to increase the amount of your capital that can be held

But it does not mean you have to fully utilize your position

👉 For example: if you have $100 in capital and you set your leverage to 100x, it means you can hold a maximum position worth $10,000 (100*100)

❗️ Let's assume we short $10,000

Even if this coin really goes to zero, you can only make a maximum of $10,000

No matter how high your leverage is

Assuming a position of $10,000, if it drops by 50%, you would earn $10,000*0.5=$5,000

Assuming a position of $10,000, if it drops by 10%, you would earn

$10,000*0.1=$1,000

Assuming a position of $10,000, if it drops by 100%, you would earn

$10,000*1=$10,000

Conclusion:

From the perspective of actual profit, if we do not consider forced liquidation, margin, and capital situations to explain this matter, even if you set your leverage to 1x or 100x, it means the same thing; it mainly depends on the "position amount" that affects your final profit

And not the leverage multiplier ❗️

Holding $10,000 with 1x leverage is the same as holding $10,000 with 100x leverage; the final profit is the same

However, the perspective of going long is different. If you want to know more, feel free to leave a comment and subscribe. I can provide a more in-depth analysis on the questions you want to know.