ETF leverage token fully combines the advantages of common spot trading, leverage trading and contract trading, but at the same time, it is more stable in risk control. The following are the specific advantages of ETF leverage token:
1. It's as simple as spot trading. It doesn't need borrowing and margin, but it can get higher profits
Although ETF leveraged token has leverage effect, it is as convenient as spot transaction in operation process. Users can purchase ETF leveraged token on ZT just like buying ordinary spot. It does not need to borrow in advance to operate like leverage transaction, nor need to bear margin and strong risk like contract transaction. It can greatly save investors' energy and satisfy users' pursuit Demand for higher returns. Take triple long BTC (bull) as an example, users only need to look at the price - enter the purchase quantity - choose to buy bull, without any other operation.
2. Stable risk control without exposure
Unlike the contract transaction, which needs to bear the risk of exposure, leverage ETF has its own "rebalancing" risk control mechanism. Leverage ETF products have a unique rebalancing mechanism, and there will be no risk of exposure.
For example, if a user does a long BTC contract three times, and then the BTC drops by 33%, there is no doubt that the user's position will be flattened and nothing will be left. However, if the user buys btc3 bull, leverage ETF will adjust its position through rebalancing mechanism to avoid the user's position being forced to level according to the market situation. Even if the BTC price drops by 33%, the user's position still has asset surplus.
3. Lower rates than leveraged deals
ETF leveraged tokens are held at a lower rate than the interest expense of the borrowed funds of the leveraged transaction.
ETF leveraged tokens are emerging financial derivatives. The above does not constitute investment advice. Please pay attention to risk control.
ETF leverage token greatly reduces the risk of strong even liquidation, but in extreme market there will be the risk of approaching zero and liquidation. Please pay attention to the difference between net value and price to avoid losses.