Today i am submitting my homework task for @stream4u which is about margin trading , Crypto leveraged token trading etc. It was an amazing lecture by professor and that too in simplified manner. So let me begin:

Crypto margin trading is a type of crypto trade carried out with the help of burrowed funds (alos known as margins) from a third party (broker). To put it simply, we can say that margin trading is a type of trade carried out with help of margins and as mentioned above margins are the borrowed funds.

As we know that the purpose of carrying out any trade is earn profit , so let's try to understand how margin trading is beneficial for investor and broker. It must be beneficial for both, only then an investor will carry out trade and a borrower will lend funds. Isn't it. Let me tell you how it works:

Here a burroweer (exchange) offers funds to broker and in turn charge certain interest from him at the end of trade. So the interest earned acts as profit for burrower. What about trader? Trader is provided funds much larger than the funds that he/she posses. It depends upon different leverage offered. Suppose any exchange offers 5x leverage, it means a trader who owns $1000 can perform trade worth $5000 and can therefore earn profit 5 times more than he could have earned with his own funds.

Let's look at other perspective, what if trade doesn't go in favour of trader and ended up in loss ?How will burrower recuperate his funds ? Keeping volatility of the cryptos under consideration, a safety mechanism is already in place to recuperate the funds and that safety mechanism is in the form of collaterals. Collaterals are the funds that a trader needs to deposit before execution of trade into the margin account, after developing a consensus with borrower on terms and conditions of trade. So in case, the trade does not go in favour , a trader get a margin call from exchange asking for deposition of extra funds. If trader fails to do so, then the exchange reserves the right to liquidate his collaterals to compensate for the margin offered.

Before starting crypto margin trading, one should be familiar with pros and cons of margin trading . A trader should not get carried away by either.

• As margin trading is a risky investment, prior to entering into trade, a thorough understanding of all aspects is needed.

• A trader should not only be happy about the profit that can be earned but should also look at the magnified risk that is inherent. A trader should burrow only that much funds, which won't land him into huge debt under unfavourable circumstances.

• Always start with small amount because that is safer practice. Only once requisite experience and confidence is gained, invested amount can be gradually pushed up.

• Start with short duration burrowing, keeping in mind the interest that one has to pay.

• Try to satisfy yourself with multiple small gains than waiting for one time huge gain because that can be risky.

Leveraged tokens trading refers to Crypto trading that is being ccarried out with the help of leveraged tokens. So the question still remains there that, what are these leveraged tokens through which this trade is being carried out. Let me try to answer.

Leveraged tokens are derrivatives of some underlying crypto token that allows trader to indulge in trading on top of leveraged benefit offered by exchange. For exampe, BTCUP is leveraged token of BTC in bullish market and BTCDOWN is leveraged token of BTC in bearish market. The price of leveraged token changes as the price of underlying asset changes but number of tokens remain same.

The leveraged tokens offered by different exchanges are different and have variable leverage level. For the sake of this task , I'll be talking about leveraged tokens on binance. Binance uses UP and DOWN for bull and bear tokens and offers upto 4x leverage on wide spectrum of tokens. BINANCE doesn't offer constant leverage rates. It varies from 1.25 to 4 x. Let's take an example

XRPUP and XRPDOWN are Ripple (XRP) based leveraged tokens. Suppose i entered into spot trading and expected XRP to go up, so i bought XRPUP and what i saw after sometime that my trading experience worked well for me, so XRPUP will increase with 4x leverage and XRPDOWN will decrease by the same amount. So i earned profit out of it. The other possibility is that, trade does not go in my favour and XRP went down, so XRPDOWN will increase and XRPUP will decrease and therefore land me into loss.

There are some fundamental differences between leveraged token trading and margin trading and they are:

• You need not put up any collaterals for leveraged token trading where as you cannot start margin trading without depositing collaterals.

• No risk of liquidation is here unlike margin trading. Here risk is mitigated by rebalancing of tokens. Rebalancing on binance differs from that of other exchanges in thet , there is no routine rebalancing instead it is done under extreme circumstances.

• Here you need not maintain margin level funds or no concept of margin call in unfavourable circumstances.

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How to plan for leveraged token trading.

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• As leveraged token trading is a high risk investment, proper research into the field is mandatory. Risk benefit analysis must be done beeforehand.

• Pay attention to different types of fee that need to be paid. For example, binance charges subscription fee of 0.01% per subscription , redemption fee of 0.01% per redemption, maintaince fee of 0.01% per day.

• Don't plan to hold keveraged tokens too long with the hope of earning more profit. Remember, it can prove harmful in volatile market.

Some famous exchanges offering these tokens are below:

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Name	Leverage
Binance	1.25 to 4x
Poloniex	3x
Bittrex Global	3x
Huobi	3x
Bybit	3x

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Price Forcast For Crypto Assets XXXXXX. (This is similar question from last course, take any Crypto Assets Chart graph, as per its current price and its market trend predict its future price for only next week, what will be its future price for next 1 week.You can predict for any direction up or down but explain it properly on what basis you have predicted the price. What will be the possible low level and high level fornext week.).

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^{BTC/USDT price chart from Apr 23 to May 1}

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^{BTC/USDT from May 1 till now}

As seen in screenshot 1 above, BTC price continued to rise from Apr 23 to May 1 making higher high pattern ( 30th april high was higher than 27 Apr) , thereafter price started falling. I am expecting it to fall further for next few days and than bounce back than again fall more or less like a lower low pattern.

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Thank you