Make money on leverage

[blingow]

Can someone explain for me how the exchanges is making money when I use their leverage service ?

Do they make money also when prices goes up and I earn money ? Or only when prices fall and I loose my money ?

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[andulolika]

By each trade you make they have a fee and for each withdrawal they take .001 (btc), thats why i personally like to make it p2p both my wallet and blockchain thanks me .

[riptide]

Leverage can be a great tool if you know what you are doing. However, if you make mistakes they will be magnified by the amount of leverage you use. So you profits can be huge, but so can your loses!

[erikalui]

When you trade, a fee is automatically deducted for each trade as you can see a Bid and Ask price. Hence when you buy or sell a trade, you buy it higher than the market value and sell it lower than the market value giving the broker an account.

[tee-rex]

Can someone explain for me how the exchanges is making money when I use their leverage service ?

Do they make money also when prices goes up and I earn money ? Or only when prices fall and I loose my money ?

Exchanges earn on fees that you pay when you make a trade. When you have more money at your disposal (even if it is not your money), you would go for more trades, and the more trades you make (whether profitable or not, though honest exchanges are interested that you would stay afloat as long as possible), the more money the exchange earns from your trades. Pure arithmetics.

[najzenmajsen]

dont use leverage , leveragy is naughty.

[BitCoinPokerBro]

Leverage can be monetized several ways. In futures leverage works on a % margin basis. For example I buy BTC10 @ 10% margin or 1btc initial margin requirement with 796 futures. 0.03% in fee's are charged upon buying and selling the future. 0.0003 per btc or in this case 0.003 twice once for the initial buy order and again for the sell order total is 0.006 for a 10btc trade. In USD terms $1.45 fee to trade BTC10/$2,450 with BTC1/$245 of risk.

Another way leverage can be monetized is similar to how retail foreign exchange is transacted (forex/global currency market). The broker will place a opening order slightly above or below the intended price. This is how btc-e's metatrader 4 platform works.

In either case the broker only makes money from fee's. Whether price rise or fall doesn't matter.

[moko666]

when doing leverage trading there are multiple facts that make them profitable
leverage,margincall level, stopout level etc that will get your order closed
leveraged trading is highly risky if you are not a professional trader

[mrhelpful]

i think you need to learn what leverage actually means.

When you pull a bank loan at 1% or a super low rate - its a form of credit that can double buying power or more.

Eg: home cost $250,000

Your real money on hand $50,000
Leverage - $200,000 loan - you can now flip or keep this home based on what you got as leverage.

[picolo]

Can someone explain for me how the exchanges is making money when I use their leverage service ?

Do they make money also when prices goes up and I earn money ? Or only when prices fall and I loose my money ?

It makes you use the service, buy&sell more btc and they are taking a fee on the loans.

[btcminer021]

Can someone explain for me how the exchanges is making money when I use their leverage service ?

Do they make money also when prices goes up and I earn money ? Or only when prices fall and I loose my money ?

Are you referring to a specific exchange that provides leverage as a service to account holders?

If that's the case, it works the same as an ordinary brokerage house: They charge you interest on the leverage, like a loan. They also get their standard fee from each trade. More trades = more fees.

For the record: don't use leverage. You'll just dig a deeper hole. It's addicting.

[Brmaster]

It also has a great chance to make you lost money

[picolo]

Can someone explain for me how the exchanges is making money when I use their leverage service ?

Do they make money also when prices goes up and I earn money ? Or only when prices fall and I loose my money ?

Take into consideration that when the price is going up the future you are buying is priced higher than the spot price but when the contract closes, the spot price will be used...

[tee-rex]

Can someone explain for me how the exchanges is making money when I use their leverage service ?

Do they make money also when prices goes up and I earn money ? Or only when prices fall and I loose my money ?

Take into consideration that when the price is going up the future you are buying is priced higher than the spot price but when the contract closes, the spot price will be used...

Not necessarily. The situation when the price of a futures contract is lower than the spot price is also quite possible. This situation is known as backwardation, i.e. the reverse of what you describe (which is called as contango).