Hi what is 50x leverage? and why compound price dump after binance listing?

[hamaravijay]

Hello!

I have seen the compound price is going down after binance listing.

But what actually is 50x leverage ......?

https://ihodl.com/topnews/2020-06-29/binance-will-launch-compound-perpetual-contracts-50x-leverage/  .........?

Thanks!

[Charles-Tim]

For example, you have $1,000 and you want to trade 50x leverage

It means 50 multiply by $1,000 which is equals to $50000.

You will be able to borrow $50,000 with $1000 from an exchange that offers margin/leverage trading.

But you have to know that the more leverage you go the more risky the trade but also the more you can gain, it depends on the market, if the market favor your prediction, you will gain but if the market goes another way around, your asset/coin you used to borrow the large amount of coins will be liquidated.

For example, 100x leverage is riskier/or profitable than 50x while 50x is riskier/ or profitable than 10x and so on and the profit or loss depending on the market price of the coin you borrowed, if it increase in price you are favored and your collateral will not be liquidated but if otherwise your collateral will be liquidated.

For beginners, you can read more about it
https://www.binance.vision/economics/what-is-margin-trading

[carlfebz2]

Hello!

I have seen the compound price is going down after binance listing.

But what actually is 50x leverage ......?

https://ihodl.com/topnews/2020-06-29/binance-will-launch-compound-perpetual-contracts-50x-leverage/  .........?

Thanks!

Talking first about compound price dump. Its nothing new because most of the time when a coin gets listed on Binance it would most likely dump before it do rises but depending on the project
if it able to get such demand but we know that getting listed on Binance isnt easy which basically means that Compound does really have it. There would always be a sell-off and its no surprise thing.

About leverage then its already being explained above but heres some tip that you shouldnt get involved with margin if you dont know on what you are doing.

[mk4]

Compound surely dumped, but I wouldn't say it's 100% due to the Binance listing. It was just like $65 before the pump, and it rose to the peak of around $380. That's pretty much 2017 pump levels. A price consolidation was pretty much inevitable, and it sure did happen as it's now $220, but it's still a lot higher than it was last month.

[Sebas.tian]

You should understand this: in cryptocurrency, what actually determine the price of a new token is the news from the companies about their listing and another news from the exchange that intend to list the token. In place of compound, they made the news when the price was still pretty low, and the price went all high when binance made their announcement. Immediately after binance listed the token it price went down because many who bought began to dump their worth. Though, the price still looks okay compared to other coins out there. 

[el kaka22]

Dump is a natural life part of any coin, when you are listing it somewhere big, there will be a huge volume, and that huge volume usually is at a big price and when you list it at a big price at first it will definitely get low. Remember the people who have a coin on its early days are people who invested in it and people who worked for it, so they will all want profit out of it as quickly as possible while people who would like to trade it just didn't had time to get it just yet.

Over time a coin will either go up if there are enough traders or if it doesn't have enough traders it will keep going low. The first days of a coins listing and its price doesn't reflect its future, just because it went down a lot during the early moments doesn't mean that it will continue to go down for a long time.