Bitmex Futures Math - many people don't know how it works

Why people open long positions if their bet is asymmetrical in the bad way.
If you open long position with leverage 1:1 your position will be liquidated (100% loss) when the price decrease by 49%.
The price must increase by 100% in order to get only 50% profit.
The maximum profit if price get to infinity (or really big number) is 99%.
  • If the price increase 10% you will get profit of 9.09%.
  • However, if the price decrease by 10% you get loss of 11%.
  • If the price increase 20% you will get profit of 16.67%.
  • However, if the price decrease by 20% you get loss of 25%.
  • If the price increase 100% (price x2) you will get profit of 50%.
  • If the price increase 200% (price x3) you will get profit of 66.67%.
  • If the price increase 300% (price x4) you will get profit of 75.00%.
For movements below 10% it's almost linear, but for long term traders with long positions it's useless. It's good for traders shorting with leverage 1:1 (for "freezing" the dollar value of the coins).

Comments

Post a Comment

Popular posts from this blog

[fixed] "Evolution is currently offline due to a network outage."

Evolution is currently offline due to a network outage. Evolution will return to online mode once a network connection is established. If you have this error when updating your system (for example, from Ubuntu 14 to Ubuntu 16), the solution is to run Evolution with this command: evolution --force-online That is usually related to a combination of evolution, dbus, and NetworkManager. With all three installed the idea was that NM would say whether it had a working network or not over dbus. Tools like evolution would ask on dbus about the state of the network and switch to online or offline as networks were hotplugged. This breaks down when the network isn't managed by NM but NM is still running. Such as when /etc/network/interfaces is configured to use ifupdown instead. If NM is running then it won't have any networks under its control and it fails to recognize that the system does actually have a network running outside of its control. It will respond to evolution
Read more

Do not use (only) flash memory (SSD drives, hardware wallets, USB flash drives) for your precious private keys!

Image
Flash memory is not a reliable medium for archives. Especially when there is no regular power. I have personal experience with usb flash drive not powered for weeks - one file became corrupted . (Read more here: Archiving private keys - TLDR version. ) You should always back up on paper and other mediums. Flash memory is prone to failure if it is not powered for weeks or more and if there are ionizing radiation When you write your precious private keys you should use technologies like Parchive and ZFS . And make several copies of your files. It's OK if you use your USB flash drive for another backup, but don't rely on it! Always back up on DVDs (even small files!), paper and online (after encryption with CPU and RAM intensive key derivative function like scrypt). Here is example of using the scrypt utility: $ sudo apt-get install scrypt $ scrypt enc -M 1073741824 -t 200 secret.txt encrypted.scrypt Do not use default values of "-M" and "-t", they
Read more

Archiving private keys - TLDR version

0. Make multiple encrypted copies. On DVDs (they are better than CDs and Blu-Ray discs; DVD+R are better than DVD-R), paper, cloud services like DropBox, OneDrive, Google Drive, e-mail it to yourself and to your friends, use P2P storage services like MaidSafe, Storj and Sia , etc. 1. Use proper font when printing PGP encrypted keys on paper. 2. Flash memory (SSD, USB flash drives, hardware wallets) is less reliable when not powered regularly (i.e. every week). 3. Use error correction methods like Parchive and ZFS. 4. Print on paper or store on digital media only encrypted data. 5. Your encryption software should use CPU/RAM-intensive KDF (i.e. scrypt with secure options - do not use defaults! ). First, encrypt with scrypt and then encrypt it again with PGP (using different password!) in ASCII armor mode before print it (other methods like QR codes may not be reliable as multiple copies of the PGP ASCII armor). Do not use the same password for the PGP because it's easy to brute
Read more
[ad removed]