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Not an "investor" guy, is it "good" to go 60x leverage on an asset now down 25%
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Date: February 18th, 2026 5:26 PM Author: the gay scientist (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678841) |
Date: February 18th, 2026 5:28 PM Author: goy orbison Interesting question maybe some xo quants will chime in (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678848) |
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Date: February 18th, 2026 5:29 PM Author: ,.,..,.,..,.,.,.,..,.,.,,..,..,.,,..,.,,. depends on whether or not there are collateral risk-management structures like derivatives or counter-bets involved. (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678851) |
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Date: February 18th, 2026 5:37 PM Author: the gay scientist Ok for the purposes of this conversation, assume that the actor involved is a short, diminutive korean male uber driver who can't spell the word "derivative" much less knows what it means (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678865) |
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Date: February 18th, 2026 5:38 PM Author: Like Clavicular but maxing annoying screeds (gunneratttt) much, much less able to pronounce it (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678867) |
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Date: February 18th, 2026 5:42 PM Author: the gay scientist (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678876) |
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Date: February 18th, 2026 7:15 PM Author: goofy shrew with big stupid floppy hat (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49679016) |
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Date: February 18th, 2026 5:42 PM Author: goy orbison (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678874) |
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Date: February 18th, 2026 5:49 PM Author: Lab Diamond Dallas Trump https://www.autoadmit.com/thread.php?thread_id=5400385&mc=40&forum_id=2#46759620 (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678884) |
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Date: February 18th, 2026 7:34 PM Author: John Frum stop gerrymandering the topic of discussion (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49679036) |
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Date: February 18th, 2026 5:42 PM Author: norwood ultra if you invest at 60x leverage, by which i understand you to mean you invest $10 to get exposure to $600 notional amount of the underlying security, you lose all your money if the underlying depreciates by about 1.67%. it's about 1.64% if you had exposure to $610 notional of the underlying (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678873) |
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Date: February 18th, 2026 5:51 PM Author: goy orbison Ok what if it goes down like way fucking more than that (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678889) |
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Date: February 18th, 2026 6:05 PM Author: Lab Diamond Dallas Trump you were liquidated and had your position automatically closed out way before. if it dropped so fast that your trade couldn't be covered through the liquidation, many exchanges have TOS that allow them to go after you for the deficiency.
So hypothetically speaking, based on the other guy's math that a 1.64% drop wipes out the position, at 1.64% you are wiped out, and if they successfully liquidated your position at that price, you would just be zeroed out with no further obligation. But let's say there were no bids at that price to sell into when they liquidated you ... so the actual price they can close your trade at is 16.4% lower (10x the drop that zeroed out your position). There is going to be a deficiency of $6000 that you're probably on the hook for.
This scenario happens in sudden drops, like that October crypto crash, where mass liquidations were happening all at once. If the price slow bleeds, you probably got liquidated in an orderly manner without any deficiency. |
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Date: February 18th, 2026 6:14 PM Author: norwood ultra generally agree, but 60x leverage to me suggests not an actual margin loan but a derivative that would normally limit losses to the amount invested, but who knows without more details (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678932) |
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Date: February 18th, 2026 6:23 PM Author: the gay scientist Agreed but I'm going to pretend like his scenario is real because it's way funnier (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678948) |
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Date: February 18th, 2026 6:38 PM Author: Lab Diamond Dallas Trump I assumed we were talking about a crypto trade, which would play out as I described. And it's a real-world scenario that actually happens. Normally it would take a low-liquidity shitcoin to instantly gap down 16.4%, but major coins can gap down 5% in the time it would take to be liquidated. And there have been a few exchange-specific scenarios where the buy-side bids were COMPLETELY WIPED CLEAN and BTC / ETH were essentially sold down to *zero*.
Maybe this happens with real derivatives, but I'm personally not aware of anywhere that a 60x leverage derivative would normally exist. 60x leverage in crypto trading is very common though, or at least it was. many exchanges have cut down the leverage they offer a lot, so you don't see it as much anymore. and you're probably dumb to use it anyways because they have "risk management" and "abnormal trading" policies that basically allow them to take the other side of your trade. When you lose, they get your money. When you win, they unilaterally close the trade out prematurely and don't pay you what they owe. |
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Date: February 18th, 2026 7:03 PM Author: norwood ultra interesting. how much collateral would an exchange/broker require for that?
if the exchange is closing out your position if it appreciates for their own risk management purposes, i take that to mean that rather than lending you dollars or anything like that to buy the 590 or 600 in excess of your 10, they borrowed the underlying itself and sold it short to you? seems sketchy |
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Date: February 18th, 2026 7:18 PM Author: goofy shrew with big stupid floppy hat interesting. 60x leverage to me suggests not an actual trading position but a make-believe scenario posited by an inveterate liar talking out of his ass about something that he thinks makes him sound smart. (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49679018) |
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Date: February 18th, 2026 9:20 PM Author: Lab Diamond Dallas Trump no nigger, there are/were several exchanges that would let you do 100x leverage. practically though, it's a dumb way to trade. if you've ever watched orderbooks for any length of time on a high volume exchange (it's actually sort of hypnotizing), you know that they rapidly oscillate up and down. even when they go up, they don't *only* go up. when you trade with that much leverage, your position will blow up just from normal bid-ask spreads and market chop. the only way you win is if you open the position and then almost *right away*, it moves in your direction enough to where you can't get liquidated from market chop.
Go look at a 24-hour chart for BTC (keeping in mind that the exchange will have greater peaks and valleys on lower timeframes). price is almost flat. yet if you had gone long at 100x at a randomly selected moment, there's an over 80% chance you would have blown up. So you think...ok, shorts must have won. Nope, the vast majority of short positions would have blown up at some point too. |
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Date: February 18th, 2026 9:51 PM Author: goofy shrew with big stupid floppy hat (genius trader who should have been long me making fun of nyuug and short me substantively commenting on achievable crypto trade mechanics) (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49679305) |
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Date: February 18th, 2026 9:56 PM Author: Lab Diamond Dallas Trump i longed my own ridicule of nyuug so there was no need to open a highly correlated trade on a separate poaster i have no control over (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49679314) |
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Date: February 18th, 2026 6:24 PM Author: Consuela counter: this is racist, math is racist, you're racist (http://www.autoadmit.com/thread.php?thread_id=5836080&forum_id=2Elisa#49678950) |