3 ms·
@notahacker - As I understand it, Trademore offers leveraged loans. This means you can trade with 2.5 times the amount of the amount of the loan. So, for exam
by deweller 12y ago
@notahacker - As I understand it, Trademore offers leveraged loans. This means you can trade with 2.5 times the amount of the amount of the loan.
So, for example, you borrow 10 BTC at, say, 20% APR interest for 6 months. You have control over 25 BTC to trade with during that time. At the end of the 6 months, you pay back 11 BTC (10 BTC + 1 BTC interest).
With 25 BTC to work with, you have the potential to gain (or lose) substantially more than the 1 BTC you paid for the privilege of using those 25 BTC during that time.
This seems like a big risk to take for Trademore, but they must have some risk management algorithms worked out on their side.