Q: What is the target of leveraged ETF products?
A: The underlying asset is the index price of the corresponding currency, such as BTC3L, BTC3S corresponds to the BTC index price.
Q: What can be used to purchase leveraged ETF products?
A: Leveraged ETFs can be purchased through USDT.
Q: What are the naming rules for leveraged ETF products?
A: For the BTC3X Long product, its English name is BTC 3X Long, abbreviated as BTC3L. And for the BTC3x bearish product, its English name is BTC 3X Short, abbreviated as BTC3S
Q: What is the difference between leveraged ETF products and spot leveraged trading?
A: Spot leveraged trading is to expand the gains and losses by borrowing assets several times more than the margin. The leverage multiple is based on the number of currency holdings;
Compared with spot leveraged transactions, leveraged ETF products do not require margin deposits, and there is no risk of liquidation. At the same time, compared with the capital interest costs of spot leveraged transactions, the holding fee rate of leveraged ETF products is relatively lower.
Q: What are the similarities and differences between leveraged ETF products and contract products?
A: Similar to contract products, leveraged ETF products are also derivatives with leverage effect, which can amplify investors' income and become a cheap risk hedging tool. However, compared with contract products, leveraged ETF products have the following unique characteristics:
1. No deposit required, no risk of liquidation.
2. Realizable relative fixed leverage: The actual leverage in the perpetual contract will change with the fluctuation of the position value. With leveraged ETF products, through daily timing adjustments, the leverage ratio can be basically constant at about 3 times.
Q: Will leveraged ETFs liquidate their positions? Do you need a margin?
A: Because the underlying mechanism is to adjust positions every day to reach a fixed leverage, and when the leverage is greater than 4 times, it will trigger the intraday position adjustment mechanism. Therefore, it will not liquidate its position and does not require a deposit.
Q: Why can leveraged ETFs avoid liquidation?
A: When the underlying price changes during the position adjustment period, the leverage of the fund will also change accordingly. When the leverage multiple in a position adjustment period exceeds 4 times, the intraday position adjustment will be triggered. For BTC3L, this is equivalent to a market decline of approximately 11.15% during the period, and a 6.7% increase for BTC3S. Such a position adjustment mechanism can effectively avoid liquidation, so leveraged ETFs do not have the concept of liquidation; but in extreme cases, such as continuous long-term fluctuations, the net value may tend to zero.
Q: Which market is suitable or not suitable for leveraged ETFs?
A: When the unilateral market (continuously rising or falling), if the correct market direction is judged, the return of leveraged ETFs is stronger than the return of leveraged futures contracts of the same multiple. And because of the existence of the adjustment mechanism, the risk of holding leveraged tokens for a long time is extremely high, and the longer the holding time, the more funds will wear out.
Q: What are the fees for leveraged ETFs?
A: The fees of leveraged ETFs are divided into transaction fees and position management fees:
Transaction fee: 0.15% for taker and 0.08% for maker
Since leveraged ETFs will automatically adjust positions, a daily position management fee of 0.03% will be charged. The position management fee will be deducted during daily position adjustment, that is, UTC 00:00:00. Position management fees will be deducted from the net value of leveraged tokens.
Q: What will happen to leveraged ETFs if their oversold prices tend to zero? Is there a liquidation mechanism
A: The underlying price of leveraged ETF products rises and falls rapidly in a short period of time, or users hold for a long time, and the net value of the corresponding leveraged ETF tokens tends to zero. We do not recommend that you hold leveraged ETF tokens for a long time.
In response to the possible danger of trending towards zero, we have designed a clearing and restart trading mechanism for leveraged ETF token products. After the net value and transaction price of leveraged ETF tokens are lower than 10% of the initial net value, we will initiate the liquidation and restart trading of the product in due course Process.
During liquidation, the corresponding leveraged ETF tokens in your position will be withdrawn by the system, and automatically settled as USDT at the corresponding liquidation price and returned to your account. The specific liquidation price is subject to the net value at the time of liquidation or the announcement. The entire process and time of clearing and restarting transactions are subject to the corresponding announcement.
Note: Leveraged tokens are high-risk products. Before trading, you need to deeply understand the basic working principle of the product. This product may bring substantial gains or losses in a single day.
Digital assets are innovative investment products with large price fluctuations. Please judge your investment ability rationally and make investment decisions prudently.