DigiFinex is launching ETF as leverage for derivative trading!, On 16:00 (UTC + 8) on April 23, 2020. The first batch of BTC was opened for bidding, supporting BTC3L / USDT (3x long) and BTC3S / USDT (3x short)
Here’s the great news, within the first 3 months of launching, there will not be any handling fees for leveraged ETF transactions！
Stay tuned for more exciting events and rewards！
Introduction to ETF leverage：
- What is an ETF leverage?
Leverage ETF has recently become a relatively popular trend for innovative financial derivatives. It has the characteristics of both spot and futures. It is a transaction that tracks a certain target asset return on a daily basis. When the tracked asset goes up or down, the leveraged ETF will multiply the fluctuation according to the leverage ratio (such as 2 times, 3 times or -1 times, -2 times).
For example: (The BTC price rises 1%, the net value of BTC3L products will rise 3%, then the net value of BTC3S products will fall 3%.)
About ETF leverage:
The leveraged ETF product originates from the traditional financial market, which is essentially a fund managed by DigiFinex’s senior asset management team. Through the combination of manual-machine and dynamic adjustment of positions, investors can easily build their own constant leverage portfolio without knowing its complicated mechanism, while amplifying their investment income and avoiding the risk of liquidation.
- What are the benefits of ETF leverage?
A.It works similarly as the spot trading model, without margin, you can trade leveraged ETFs like spot trading
B.In spot transactions, larger funds leads to longer the transaction time span, thus the higher the cost of funds and higher fund utilization rate.
When the funds are small, the profit caused by currency price fluctuations will become small too. Amplified returns can also be an effective risk hedging tool and trading ETF products can double.
C.The ETF leverage is operated and managed by DigiFinex’s senior asset management team. Thus there will be no risk of liquidation. The management team will dynamically rebalance the fund ’s investment portfolio and automatically increase, or decrease the position according to the profitability of the user’s account to ensure that he or she will not experience liquidation.
D.It allows users to enjoy multiplied benefits of futures contracts.
Note: The ETF model is concise, similar to ordinary currency trading, and the risks are lower than traditional futures.
ETF leveraged transactions examples:
User A has been bullish trading in the BTC market recently, and put out a 10000usdt limit transaction of BTC3L (bitcoin tripled). After a period of time, the value of the BTC will rise by 10%, and leveraged ETFs will triple by 30%. Finally, the assets of User A will rise from 10000usdt to 13000usdt, and the income triples.
If User A did not trade through leveraged ETFs, the assets will only increase to 11000usdt.
User B has been bearish trading in the BTC market and took a 10,000 usdt limit transaction of BTC3S (Bitcoin tripled short). After a period of time, the value of BTC fell by 10% and the leveraged ETF would triple by 30%.
If User B did not trade through leveraged ETFs, the assets will only increase to 11,000 usdt.
If BTC's market fluctuates negatively when User C buys ETFs, he or she can lose up to 3 times the amount. However, the rebalancing mechanism will protect User C from liquidation. By dynamically balancing the portfolio, it can immediately increase or decrease positions and control risks.
Risk Warning: If the market prediction is in-accurate, there may be a risk that the price will approach zero during extreme market conditions.
Website：Select [ETF] from the [Homepage] navigation bar
App：Log in to your DigiFinex APP-select [ETF] from the navigation bar
Thank you for your support!
16 Apr 2020
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