Best Trades of the Week on MPX

Yesterday Bitcoin tested $14,000, creating a lot of opportunities for traders. We saw several great trades made on MPX.

Nearly $70,000 in short bitcoin exposure was initiated with sBTC, by risking just $2,000.

Below illustrates how sBTC and LBTC can be very profitable with limited risk.

Here are some of the trades from yesterday in sBTC, a short Bitcoin token traded on MPX, with a Price Cap of $14,000. If the price of Bitcoin goes above the Price Cap, the contract settles.

Let’s focus on the five 1 lot buys in sBTC around $400. When the trader entered these positions, BTC was near $13,600. If the price of Bitcoin goes above the Price Cap, the token expires resulting in a maximum downside of each of these positions of approximately $350 to $450 (the executed price of sBTC).

The trader got short exposure to ~$13,600 BTC per sBTC token they bought.

The leverage implied by this position was about 35x!

We all know BTC came screaming off $14,000 area. At the time of writing, the positions are still open and marked to market up about $4,000. Great work with a 100% return in less than a day!

Update: 4 out of 5 sBTC were exited with an average price of ~$1,700 making this trade a $6,500 winner!

How does all of this work?

We make it easy to get short (sBTC) or long (LBTC) leveraged Bitcoin (as an ERC-20 token) on the Ethereum blockchain. Here are a few articles on how these tokens price and trade.

TLDR: Our contracts have a Price Cap and Price Floor that pre-defines the maximum profit and loss of any trade.

That means you know exactly what you are risking at all times. Sorry guys! No more #BitmexRekt. Also, because the maximum loss is defined, the contract is always fully collateralized with no margin calls or socialized losses.

Below is a screenshot of our order book. Notice the leverage column. The amount of leverage changes with the price.

For sBTC — as bitcoin goes up we get closer to the Price Cap which decreases the maximum downside of sBTC and in turn reduces the price. Long story short, the closer we get to the Price Cap the more leverage implied by the position.

This is seen in the below order book for sBTC. As the price of sBTC goes down the amount of leverage increases.

Soon we will release a more in depth look at how leverage works soon as a part of our MPExplained educational blog series.

Claim MKT for paying reduced fees and make your first trade today on MPX.

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