How to Multiply Profits Using Leverage When Price Goes Down?
1. Take BCH/USDT as an example. Assume the maximum leverage is 5x, and you predict the price of BCH will go down from 400 USDT to 250 USDT.
2. If you have 1 BCH in capital, with 5x leverage, you can borrow up to 4 BCH and sell 5 BCH at 400 USDT each. When the price drops to 250 USDT, buy back 4 BCH to cover the short position.
3. Profit calculation: 2,000 USDT - 1,000 USDT - 400 USDT = 600 USDT.
4. If you use your principal to trade spot, you can only buy low and sell high.
| Sell Quantity | Sell Price | Buy Quantity | Buy Price | PNL |
| 5 BCH | 400 USDT | 4 BCH | 250 USDT | 600 USDT |
Note: To simplify the calculation, the above example ignores the borrowing interests, margin profit/loss, trading fees, and funding rates. The results are for reference only.
Steps for Going Short
If you have 1 BCH in capital and want to place a limit order to go short on BCH with 5x leverage:
1. Visit CoinEx's official website (https://www.coinex.com), log in to your account, and select [Spot Trading] under [Spot] in the top navigation bar.
2. On the "Spot Trading" page, search for and select the BCH/USDT trading pair in the search bar. Then, switch to [Margin Trading] in the market selection area.
3. Click the asset transfer icon. Select the transfer direction from [Spot] to [Margin]. Double-check the coin name, enter the amount, and click [Confirm].
4. On the “Margin Trading” page, click [Borrow]. Select the coin [BCH], enter the Borrowing Amount, enable [Auto Renewal] (enabled by default), and click [Confirm] to complete the borrowing.
Note:
(1) When you use 1 BCH as collateral and borrow 4 BCH, your capital is magnified by 5 times, which means 5x leverage.
(2) The loan period is 10 days. If the loan is not repaid within this time, the Auto Repayment will be triggered.
(3) Auto Renewal:
- If Auto Renewal is disabled for a loan, you will receive notifications at 72, 24, 8, and 1 hour before the loan is due.
- If Auto Renewal is enabled but fails due to insufficient balance in the loan pool, you will be notified for a loan call. The due time is extended by 24 hours for repayment. If you still haven't repaid the loan within this buffer period, the system will retry auto-renewal. If it fails again, Auto Repayment will be triggered.
(4) You can also enable Auto Loan, allowing the system to determine if borrowing is necessary upon placing an order. The system will then automatically borrow the required amount.
5. In the BCH/USDT Margin Trading market, sell 1 BCH at 400 USDT.
Note: After the order is filled, you can view your position details in [Margin].
6. When BCH drops to 250 USDT, you can buy back BCH and repay your loan.
7. On the Margin Trading page, click [Borrow] > [Repay]. Select the coin [BCH], enter the Repayment Amount, and click [Confirm] to complete the repayment.
Note:
- You can also enable Auto Repayment. After borrowing, the system will check all your Margin accounts every 30 minutes.
- If the available assets in your accounts are sufficient for repayment, the system will trigger an Auto Repayment.
8. After repaying, you can transfer the remaining assets back to your Spot Account:
Click the asset transfer icon. Select the transfer direction from [Margin] to [Spot]. Double-check the coin name, enter the amount, and click [Confirm].
Risk Warning:
Margin trading amplifies potential returns through borrowed funds, but it can also expose you to amplified losses if the market moves against your expectations. Margin trading carries risks. Traders should avoid opening positions with high leverage to prevent forced liquidation or bankruptcy during extreme market conditions.
🔗 Explore More
Introduction to CoinEx Margin Trading Page (Web)
CoinEx Margin Trading Tutorial (Web)
How to Buy Long with Margin Trading (Web)
Auto Loan & Repayment for Margin Trading