Author Topic: If I short bitUSD will I maintain my BTS exposure?  (Read 946 times)

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Offline bitmarley

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Offline lil_jay890

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It increases your exposure to BTS...  If BTS falls versus bitUSD when you cover, you must use some of your posted collateral.  If you shorted 100 bitUSD and received 10,000 bts in return you need to pay back the 100 bitUSD within 30 days.  If BTS has fallen by 10%  you would need to convert your borrowed 10,000 BTS plus 1,000 additional BTS to pay back the 100 bitUSD.  You would have a net loss of 1,000 BTS.

If the price of BTS rises vs bitUSD you still need to return the 100 bitUSD by the end of the shorting period of 30 days.  If BTS rises 10% vs bitUSD you would convert 9,000 bts into 100 bitUSD and cover your short position.  You would keep 1,000 BTS from the original 10,000 BTS that were borrowed.  You would have a net gain of 1,000 BTS.

Offline bitmarley

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I'm wondering how creating a new bitUSD short position will modify my BTS exposure if at all.
Can anyone perhaps describe this and if the outcome is variable what the matrix of possibilities looks like?
Thanks.