Re: [BTS] Bitshares #1 Fastest Crypto, Tokens, DEX, ICO's platform ಠ_ಠ (unofficial)
This is not true. Check your math. With 1.75x collateral you have only 1.33x leverage, which is not bad too, but not as good as 2x leverage.
In practice, your collateral should be larger than minimum, like 2x, and with 2x collateral you have no leverage, unfortunately.
Thanks for your comment. I want to make sure this is correct as well because I have an idea based on this, so highly interested.
My math is pretty simple:
For a single margin long step at 1.75x collateral (absolute extreme impossible case)
You lock up 1.75 bts in contract.
You get 1 bts worth of loan (e.g. bitUSD)
you buy 1 bts with your loan
now you have 2.75 bts big position by putting up 1.75 bts giving you 2.75/1.75 leverage or 1.57x
I substituted the numbers into my previously used examples with margin on left and spot on right. For both I observed changed in total worth in bitUSD for 2x increase and for 50% drop in price of BTS. For both increase and drop the leverage calculated (or rate of gain vs loss) was increased by 1.571x compared to spot.
For example the long on increase of price had net profit of 0.362 bitUSD for margin and net profit of 0.231 bitUSD for spot. 0.362/0.231 = 1.57.
Hope this makes sense.
Higher leverage is done by reborrowing bitUSD by using BTS, the BTS you have from buying it with previously borrowed bitUSD to repeat the steps. Kind of confusing, so could be automated to a degree.
To be honest little reason to go more than 2 steps.