“Short”, it’s when you sell at a high price then buy at a lower price. In this way, you can earn a profit from the price difference.
Let's learn how to short on margin trading.
It's when you sell at a high price then buy at a lower price.
In this way, you can earn a profit from the price difference.
Let's suppose that the BTC price is currently at 10,000 USDT and you think that it will drop in the future.
Log in to Sherolex.
Transfer 10,000 USDT as collateral from your spot account to your margin account.
On the BTC/USDT trading page, under the [Cross 3x] tab, select [Limit] order, click on [Borrow] and input 1,000.
Scroll to 100% and click on [Margin Sell BTC].
Once the order is completed, you would have borrowed 2 BTC and sold them at the price of 10,000 USDT each.
■How to earn a profit?
After several days, if the BTC price goes down to 7,000 USDT, you will use the [Repay] function and buy 2 BTC at 7,000 USDT each.
Then the initially borrowed 2 BTC will be refunded with 14,000 USDT automatically.
If the handling fees and interest are ignored, in this case, you would have 16,000 USDT in your margin account and earned 6,000 USDT which is a 60% profit.
■How to manage risk?
The market may goes in the opposite direction.
It is recommended to use an OCO (One-Cancels-the-Other) order to manage the risk.
Input price 7000.
Amount 2 BTC
Click on [Buy BTC].
If the BTC price rises to 10,900, a "buy" stop limit order at 10,905 will be placed.
And the limit order will be canceled.
If the BTC price goes down to 7,000, a "buy" auto-pay limit order at 7,000 will be placed and the stop limit order will be canceled.
Here is how you can short on Margin Trading and manage your risk using the OCO order.