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Because you can't go below zero. There's a floor to how much you can lose, and it's "everything you've put in", not "everything plus additional debt". ...typi
by TameAntelope 5y ago
Because you can't go below zero. There's a floor to how much you can lose, and it's "everything you've put in", not "everything plus additional debt".
...typically, anyway.
- vageli 5y ago> Because you can't go below zero. There's a floor to how much you can lose, and it's "everything you've put in", not "everything plus additional debt". If you're leveraged, you are borrowing money, which means you can lose more than you put in as you could lose the money you borrowed and thus would owe on the debt. Further, if you are shorting bitcoin for instance, there is no floor.
- zenlikethat 5y agoYou can't generally go beyond 0 though. You'll get liquidated before that due to the exchange's risk engines. If it goes beyond, that loss is passed on to the lenders.