Lecture 2: Advantages of leveraged ETF

The following are the advantages of leveraged ETF:

• Spot trading and no need of margin

Investors can trade leveraged ETF on HOTBIT with the same process of spot trading. There is no margin required, so no liquidation problem. Take purchasing BTC1D3L (1Day 3x Long) as an example. Users only need to check the net value, select the proper price, and enter purchase quantity to buy BTC1D3L.

• Risk limitation

Leveraged ETF brings in risk-control mechanism (refer to the details in the following part). For example, if BTC falls by 33%, the 3 times BTC long contract will be liquidated without any doubt, while the leveraged ETF product BTC1D3L, through rebalance mechanism, will not approach zero. There will be some asset left.

Disclaimer

Leveraged ETF is an emerging financial product. The content above does not constitute investment advice. Please watch out investment risks.

Leveraged ETF reduces the risks of liquidation, but in extreme conditions there’s possibility that the price will approach zero and be liquidated. Please pay attention to the difference between order price and net value, to avoid losses.