Long

By going long, a trader buys a Perpetual contract with the expectation that the underlying asset will rise in value in the future. Rather than buying and holding the underlying asset, traders buy synthetic exposure to the asset.

To open a long position, click on “Buy” in the left panel once you have selected the order type.

The trader believes that the BTCUSD exchange rate will rise. He has 100 USD of equity; with 25x leverage, he can control a position worth $2,500 USD. The BTC-USD perpetual contract is trading at $50,000 USD.

To go 25x long $2,500 USD worth of BTC-USD Perpetuals contracts he buys: $2,500 USD / $50,000 USD / BTC = 0.05 BTC.

If the price of BTC-USD rises by 10% to $55,000 USD, his futures position is now worth: BTC 0.05 * $55,000 USD / BTC = $2,750 USD.

He has made a profit of: $2,750 USD – $2,500 USD = $250 USDC.

His return on 100 USD of equity is: $250 USD Profit / $100 USD Equity = 2.5x.

Short

By going short, a trader sells a Perpetual contract with the expectation that the underlying asset will decline in value in the future. Rather than selling the underlying asset, traders sell synthetic exposure to the asset.

To open a short position, click on “Sell” in the left panel once you have selected the order type.

The trader believes that the BTC-USD exchange rate will decline. He has 100 USD of equity; with 25x leverage, he can control a position worth $2,500 USD. The BTC-USD perpetual contract is trading at $50,000 USD.

To go 25x short $2,500 USD worth of BTC-USD Perpetuals contracts he sells: $2,500 USD / $50,000 USD / BTC = 0.05 BTC.

If the price of BTC-USD declines by 10% to $45,000 USD, he can now close his position: BTC 0.05 * $45,000 USD / BTC = $2,250 USD.

He has made a profit of: $2,500 USD – $2,250 USD = $250 USD.

His return on 100 USD of equity is: $250 USD Profit / $100 USD Equity = 2.5x.

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