Suppose there is a person who owns 100U
Then put it in the contract account. If he wants to go long 100U worth of Bitcoin, should he use 100 times to open 1U or 1U to open 100 times?
From my perspective, in the case of full position and not moving the remaining funds to other wallets, the difference between the two operations is:
With 1U of 100 times the capital, you still have 99U that can be used for operations in the contract account, for example, if you open 2U of 100 times of Ether,
100U1 times, all your funds are in Bitcoin, so the fund utilization rate is not as good as buying spot directly (you will not be charged a funding rate)
I know some people will mention the issue of funding rates, so I will tell you here:
1U is 100 times and 100U is 100 times. Both are 100U of Bitcoins, so the funding rate charged is the same!
Of course, the 200U Ethereum mentioned in the example will also be charged an additional funding rate.
Therefore, high leverage is not charged more because it will be charged more, but because the capital utilization rate is better, so the money charged will increase because the position becomes larger.
