RIP

R E K T
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>K
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>tfw had bitmex open and was thinking about going long at 5490 2 hours ago

It means someone shorted btc (bet agaisnt it expecting the price to go down). But the price went up and their position was 'liquidated' , which means their position was closed out because they lost too much money to maintain their margin.

So for the $10m liquidation the person didn't actually lose $10m, but we don't know the leverage they are using.

If he used 5x he lost 450 BTC
If he used 10x he lost 195 BTC
If he used 50x he lost 28 BTC

etc etc

eh why would he lose less the bigger the leverage is?

Buy at market just for the keks

One order at the time boyos

because that means his position was smaller
the % loss for that person was bigger, but the flat btc value was smaller

i dont get it lol

Also a beginner, but how I understand it: for a higher leverage his absolute wager was smaller, but his relative wager bigger. In any case this guy lost some dough.

In any case, his notional position was 10 million USD. The higher the leverage, the less actual capital you need to hold against your notional position. At 5x leverage, you need 1/5th of the notional position held in actual capital (2 million USD). At 10x, you need 1/10th (1 million USD). At 100, you need 1/100th (100k USD).

So at the ABSOLUTE MINIMUM he lost 100k on that trade.

The higher your leverage, the cheaper the position is costing you.

e.g 1 BTC position @ 10x = costs you 0.1 btc
1 BTC position @ 100x = costs you 0.01 btc

Since you spent less on the position they will cut you out earlier because you have less money to cover losses whilst still trading the same $ amount

In this case liquidation was 5370.8
if he used 10x that would mean he shorted at 4861.5
if he used 50x that mean he shorted at 5290.4

It sounds really complicated typing it but it's not

I always try to learn leveraging when people here talk about it and I read up, but I can never quite understand. If BTC is worth $5000 and I short, meaning I think BTC will go down and it goes up instead, what do I lose if I bet 1 BTC? Vice versa for longs? As I understand, I have to have a range. So, if I say, BTC will go down to $4500 and won't go above $5100 and it goes past either way, I'll lose. I don't get the 5x or 100x leverage. Someone talk to me like I'm stupid and let me know if I'm getting the basics, pls.

It seems a liquidation cascade can increase the price of bitcoin too.

I'm also new, but I've traded btc on like 2x margin a few times. It's very much like normal trading:
If you buy BTC at $5000 and set a sell at let's say $5800, this is called a long position, you've borrowed USD to buy BTC, and if the price rises, you can repay what you've borrowed, the fees associate with the borrownig, and keep what remains as profit. The profit here is greater because it is based on the total purchase (your money + borrowed money), rather than just your money. If the price falls too far, the BTC will automatically sell for a price such that USD revenue + your margin account balance = the lender's money (that automatically determined price is the lower limit of that range you're talking about). So they never lose anything, and you potentially lose everything. There's also times where you only lose a portion of your balance called a margin call, where there's a certain time frame for which you can have a position open, and once that time frame closes, the BTC is sold and you take whatever profit/loss at the then-current price.
If you short, it's the same thing, except with selling borrowed BTC for USD, and you profit if it falls. Pulling out completely is called closing your position.
Not sure about any of this. Anons will correct me if I'm wrong, or they'll tell both of us to go fuck off and google it.

everyone can see these positions, right? how do you not get fucked doing this?

You short x btc with y leverage at price z. When the price varies by n % relative to z, the value of your position becomes x*(1-0.01*n) (n negative when price below z, positive when above z).

You have an amount f of funds on your account. The exchange liquidates your short when (f+x*(1-0.01*n))/f < m where m is the margin liquidation percentage on the exchange.

When you change the leverage y you change x, a 10 times greater leverage means a 10 times greater x: your earn and lose money 10 times more quickly as the price varies.

Thank you, anons. I think I have a better understanding now.

made a mistake

>(f+x*(1-0.01*n))/f < m
should read
(f-x*0.01*n)/f < m

Basically when you lose a big percentage of the funds you have on your account the exchange automatically closes your short before you lose more than what you have

I read this entire thread and I'm seriously confused now as to what "short" means exactly.

I thought you shorted a stock if you sold it before you intended to, for example if you were holding it for a year you would call that long, but if you expect trouble and you sell, that's a short.

Anyways, I know about leverage, and that people can get a larger sum to play with by putting a portion of the money down, and that if the price falls too much the exchange will close them.

What I don't understand here is how these guys lost money when the price of bitcoin rose.

I don't think you're cut out for this

shorting is borrowing someones item and selling it, hoping that the price goes down. you then buy back the item and return it to the owner and keep the profit.

they lost money because they shorted and the price went up

yesterday there was 10mil rekt

higher leverage allows you to create a larger position.

The position size (how many coins you borrow) is what matters. The amount you gain or lose depends on this.

It's confusing because say he borrowed 1x. That means that every coin borrowed is margined by one of his own coins. In theory it should be more difficult to be liquidated at lower leverage.