Disclaimers
- None of this is investment advice.
- Much of the below analysis ignores any difference between futures and spot prices, and ignores the effects of fees. It also ignores slippage incurred while rebalancing, and generally assumes that all transactions happened at theoretical prices rather.
- While your account's holding of a leveraged token cannot be liquidated, the leveraged token itself theoretically could be. Leveraged tokens greatly reduce the risk of liquidation but cannot make it fully impossible; if markets instantaneously gap down 50%, there is nothing that can stop the +3x leveraged position held by the leveraged token from getting liquidated. In addition, while leveraged tokens attempt to avoid getting liquidated, this does not prevent them from being able to suffer heavy losses.
- Leveraged tokens can have unintuitive edge cases. The below is a summary of their common behavior.
- While this does generally describe how Leveraged Tokens work, it contains approximations and should not be taken as precise.
- Users should trade Leveraged Tokens at their own risk.
- Leveraged tokens, like the rest of FTX, are not being offered to US users.
[Update 10:21pm: Leveraged Token markets vs USDT are live on FTX! ftx.com/trade/BULL/USDT]
Binance is going to de-list Leveraged Tokens next week; you can see their announcement here. Leveraged Tokens are complicated products, and Binance doesn't want to manage the user education and customer support for them. You should read this article on Leveraged Tokens for a description of how they work.
If you hold Leveraged Tokens on Binance and want to keep them, you should open an account at ftx.com! You can deposit them into your FTX wallet, and you can trade (and create/redeem) them there. You can also deposit them at any of the other exchanges that support them. Otherwise they will be replaced BUSD in your Binance wallet. Here is a GUIDE on how to do it!
In addition and to better support users transfer their positions or trading, FTX will be listing Leveraged Token vs USDT markets in addition to our current Leveraged Token vs USD markets.
FTX also just launched spot BTC/USDT and ETH/USDT markets!
Finally, a reminder that you can find a partial list of exchanges that support Leveraged tokens here, including some new additions!
________________________________________