Lecture 6: The Mechanism by Which Leveraged ETF Achieve Profit and Loss

Leveraged ETF work in much the same way as spot trading, with investors making profits by judging the ups and downs of anchored tokens.

Long

Take BTC as an example. User A buys BTC3L with 1000USDT. When the price of BTC rises by 10%, the net value of the BTC3L will rise by about 30%, and your total assets will rise to about 1300USDT. Compared with direct purchase of BTC, an additional profit of 200USDT can be generated.

Short

Taking BTC as an example. User A buys BTC3S with 1000USDT. When the price of BTC falls by 10%, the net value of the BTC3S will increase by about 30%, and your total assets will rise to about 1300USDT.

In addition, if the anchor token moves in the opposite direction to the operation, then the loss will become three times,. Investors should pay attention to the risk.

Warning

Leveraged ETF is a tradable product that tracks three times the daily profit of underlying assets. Users shall pay attention to the gap between the actual net value of the product and the latest price when placing an order. If you put the order in the opposite direction, there is a risk that the price will approach zero in extreme conditions. This product subjects to the derivative with high risk. Please watch out the risk in investment.