1. Spot: The act of buying spot coins and waiting for the price to rise before selling them to earn the difference.

2. Contracts: cryptocurrency derivatives. By judging the future market ups and downs, choose to go long (buy up) or short (buy down) to gain profits from the rise/fall of digital currency prices.

3. Leverage: Used in conjunction with contracts to increase profit margins. The size of the leverage ratio is proportional to the return and also proportional to the risk. A high leverage ratio means high returns and high risks, while a low leverage ratio means low returns and low risks.

4. Long (bullish): optimistic about the future market, buy bullish. Return = principal × increase × leverage multiple.

Loss = principal × decline × leverage multiple.

5. Short selling (short position): bearish on the future market, sell bearish. Profit = principal × decline × leverage multiple

Loss = principal × increase × leverage multiple.

6. Liquidation:

Long positions blow up:

The principle of long orders is to be bullish on the future market. First, borrow money to buy, and then sell at a high price to make a profit. Pay back the borrowed funds, and the remaining is the profit. If a long order encounters a falling market, the loss amount reaches the account margin and is forced to close, and the account assets are cleared. For example, at a certain price, you think the market will rise in the future, so you open a 10x long position, that is, the long amount is ten times the margin. Your margin is 10,000 U, and 10x long is equivalent to the exchange lending you 90,000 U first. You use this 100,000 U to open a long position. The price of the currency has fallen by 10%, which is equivalent to a loss of 10,000 for opening a position of 100,000, and your principal is only 10,000, and the remaining 90,000 is borrowed. In order to prevent you from not being able to pay it back, the exchange will forcibly recover the 90,000 lent to you. Because you have already lost 10,000, there is no money in your account, and it is zeroed. This is a long position explosion.

Short position blowout:

The principle of short order is to be bearish on the future market. First, borrow coins to sell. If the price drops, buy the same coins at a low price and return them to the borrower. The remaining money is the profit. If the short order encounters a rising market, the money previously borrowed to sell is not enough to buy back the same number of coins at a high price. It will be forced to buy back. At this time, the price of the coin is higher than the opening price. Your principal plus the loan can only buy back the same number of coins. After returning the coins, your money is gone. For example, if you short a certain currency at a price of 10,000 U, and you have a margin of 10,000 U, it is equivalent to the exchange lending you 9 coins worth 90,000 U at this time plus your coin worth 10,000 U, a total of 10 coins. You sell them first, and then buy 9 coins at a low price after the price drops and return them to the borrower. The rest is the profit. But if the price rises by 11%, and the currency price is 11,100 U at this time, the 100,000 U you sold before can only buy 9 coins at this time, but the exchange has borrowed 9 coins from you before, so you can only afford 9 coins at most. In order to prevent the currency price from continuing to rise, the exchange will force you to use the money you used to open a short position and sell 100,000 U to buy back 9 coins. At this time, your principal is gone, and this is a short position blowout.

7. Margin Trading: When the market fluctuates violently, the price of the currency reaches the liquidation price, but the position cannot be forced to close in time because the fluctuation is too fast, resulting in the inability to repay the borrowed money or currency. Not only will the funds be liquidated and return to zero, but you will also owe money to the exchange.

8. Close position: The act of manually terminating a contract transaction, taking profit/stop loss.

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