how can I use leverage without hitting a margin call and having everything I own and my soul getting liquidated?in what circumstances is using leverage a smart move and not degenerate gambling when longing or shorting an asset? (crypto, stock, etc... but mainly crypto since this is this board's main topic)
>>59655275You don't. In crypto spot is more than enough. You will make a shitload of money if you are not retarded
When you use low leverage futures , 1.5-2x, to long assets at the bottom, that is smart leverage
>>59655275buy 2x leveraged nasdaq ETFs and hold. That's the right way. Or go 10x lev on crypto with your whole portfolio which should give about the same odds of winning like betting everything on red but with better potential returns
>>59655275don't use leverage. if you want multiples, buy something in an emerging sector that's undervalued and just hold
1.2x long and hold stocksIf you get liq then the world has larger issues
>>59655343such as?
>>59655275you make an exchange with leverage trading and fuck over your customers. that's the only right way to use leverage.
long the bottom and short the top (unironically the only good time to use leverage)
>>59655359RWA is def on my radar. Thinking projects like CHEX are gonna moon. tg is chex_token
>>59655377OK but how do you know that it's the bottom or the top and not just a bear or bull trap?
>>59655275Deep ITM options, which you then exercise to slurp stocks for cheap.Of course you are too poor to do this, so it's not even worth googling how to turn on options on your robinhood account.
>>59655275You hedge. I'll give you an example. Right now I have $1.2 million across stocks, options, crypto futures and futures options. I have $220k actual dollars collateralizing it. Does this mean if the underlyings go down 18% I lose everything? No. I'm hedged. Say I just opened a btc futures position at $100k and I take 10 contracts (1 BTC). That's $100k notional position I pay only a fraction of that for initial margin. What do I do next? Buy 10 puts on the futures at say, 95000 strike. Doing this you can build pretty large positions without exceeding your margin, and everything becomes a straddle, if you hedge sufficiently. In futures I notice I usually need to overhedge because the options have no gamma, but in stocks, 1:1 (100:1) is enough. For instance. I short some stock, 10k shares, we'll say this is $200k at $20/sh. I immediately buy 100 calls on it at $25 strike. I pay $1 premium. Here's what happens>stock goes to $10Profit on the short, lose the call value. Net profit. >stock goes to $30Lose on the short but my losses are limited to $6/sh. That's a lot better than the $10/sh it would be unhedged. Why leverage? Because hedging is expensive, so maximize profits, but also some positions are inherently leveraged (futures, shorts).With the right mix of options you can profit when you're totally wrong about direction. So what I'd normally do against a short is have calls at graduated strikes, so as the price moves against me, I can net profit from the delta improvement on otm calls. But you can do this with puts on longs too to get really big long positions if you want. As the price moves against you, otm deltas improve and you get less exposed; as it moves with you the deltas break down and you get more exposed. So, in a successful hedged short, you get effectively more short as the price declines and longs vice versa.
>>59655275Never use it on highly volatile assets like crypto, that's step 1. Leverage is there to make boring ass assets more exciting
