How to multiply profits when the price goes down?
Suppose that you have 1 BTC, you can use 10X leverage to sell 10 BTC in the BTCUSD market.
When the BTC price goes down from 15,000 USD to 14,000 USD, your PNL is 10 * (15,000-14,000)= 10,000 USD.
If you trade in spot markets, you can only buy low and sell high instead of going short.
|Position Amount||Opening Price||Closing Price||PNL|
|10 BTC||15,000 USD||14,000 USD||
The amount of BTC equivalent to 10,000 USD
Note: To simplify the calculation, the above process ignores the calculation of premium, margin profit and loss, trading fees and funding fees.
How to sell short in Inverse futures contracts
Example: Open a short position in cross-margin mode with 5X leverage in the BTCUSD market.
1. Enter futures trading page
(1) Visit CoinEx official website (https://www.coinex.com), log in to your account, and select [Futures Markets] under [Futures] at the top navigation bar.
(2) Click [Inverse Contract], and select the BTCUSD trading pair.
2. Transfer assets to Futures account
Click the "Transfer" button, set the direction from [Spot] to [Futures], select [BTC] and enter the amount, then click [Confirm].
3. Set margin mode and adjust leverage
Click the "Position Mode" button, set margin mode as [Cross] and select [5X] leverage, then click [Confirm].
4. Sell BTC to open a short position
(1) Take limit order as an example, set the [Price] and [Amount], then click [Sell/Short] to submit the order.
(2) You can check position details in [Current Position] after the order is executed.
5. Sell BTC to close the position when the price drops to the expected level
(1) Option 1: Close position in order placing area
Take limit order as an example, set the [Price] and [Amount], then click [Sell/Short] to submit the order. Your position will be closed when the order is filled.
Note: When closing a position in the order placing area, please make sure the order amount doesn't exceed the position amount. Otherwise, a position in the opposite direction will be opened after the order is executed.
(2) Option 2: Close the position in [Current Position]
Take limit order as an example, click [Close] in [Current Position] and switch to [Limit], set the [Price] and [Amount], then click [Confirm] to submit the order. Your position will be closed when the order is filled.
(3) Option 3: Use [Liquidate] or [TP/SL] to close the position
When [Liquidate] or [TP/SL] is applied, the system will use Auction-style Liquidation Strategy to close the position. For more details, please refer to What's Auction-Style Liquidation Strategy and How to Take Profit & Stop Loss in Futures Trading.
6. Transfer assets to Spot account
Click the "transfer" button, set the direction from [Futures] to [Spot], select [BTC] and enter the amount, then click [Confirm].
Futures Trading not only allows you to magnify gains with fewer funds but can also saddle you with amplified losses when the market moves against you. Therefore, we strongly advise entry-level users NOT to use high leverage to avoid forced liquidation or even bankruptcy.