I should know by now but I want to make clear a couple of things:
1. What is the short wall mean that I see on BTSX?
2. Back to basics with an example (sorry for flipping the market):
a) I buy from an exchange 10,000 @ 0.03 = -$300
b) I short $300 @ $0.03 so at some point I will have to repay $300 to cover (10,000 BTSX is held as collateral)
question: How much the BTSX value has to fall to have a margin call and lose all my collateral?
c) Assuming that BTSX increases vs. usd so now 1 BTSX = $0.06.
I buy from an exchange 5,000 BTSX @ 0.06 = -$300
to cover my $300 debt and my 10,000 collateral is released and I decide to sell them. My p&l is therefore -$300 -$300 + 10,000 x $0.06 = 0
So the question is. If from the beginning I believe that BTSX will increase and will be $0.06, why short in the first place and risk my collateral and not wait until it goes to $0.06 and sell them. If I do that:
I buy 10,000 @ 0.03 = -$300
I sell 10,000 @ 0.06 = +$600
My p&l is +$300
So basically why short bitusd in the first place? In theory since I am short and the price falls I win by buying back the collateral at lower price and pocketing the difference so I am pretty sure I made a mistake in my analysis but I just can't see it at the moment so please explain by replying to the specific example.
Moreover I understand that when I short, the system will ask for twice my collateral but I don't see that. If I short $300 @ 33.33 ($0.03) it will ask for 10,000 BTSX.
Apologies in advance but my head gets confused many times in my thoughts...