How short positions can protect your own portfolio


How to make big profits in a short time in the bear market thanks to short positions and PrimeXBT.

The market for cryptocurrencies is considered to be highly volatile, which as a result is exactly what many traders want. After all, the violent price fluctuations offer an excellent opportunity to achieve profits in a relatively short time that are rather unusual in the stock market. Many investors concentrate on the spot market and hold crypto assets such as Bitcoin, Ethereum, XRP or BNB.

If the market goes into a bearish phase, as it was last in May 2021, then many of them lose profits or even slide into the red. The reason is that you can hardly implement a buy-and-hold strategy successfully in these downward phases. It is entirely possible to participate in them. One of the fastest and most tech-savvy trading venues for it is PrimeXBT.

Long and short positions explained

Taking a long position usually means expecting the market or a particular asset to continue rising. Therefore, you buy a crypto asset with the expectation of being able to sell it again later at a higher price.

So-called longs are only suitable for bullish market phases. The opposite is the short position. A short can be used to sell a crypto asset without currently owning the asset, so you owe the asset until you close the short position, preferably by buying it back at a lower price. The resulting exchange rate difference forms either the profit or the loss.

Short positions on PrimeXBT

With a short position, market phases can even be exploited that would otherwise not be realizable. Either you participate in the opportunity because you want to realize price gains in a falling market or you protect your portfolio.

With a short position that has the same position size as the rest of the portfolio, for example, you can operate a hedge. If the market goes down, then the short sometimes generates profits equal to the losses that arise from holding spot positions.

PrimeXBT offers its clients optimal conditions for this because it is possible, among other things, to open positions with a fraction of their own capital. This is made possible by margin trading, which is much riskier, but in return allows position sizes that are many times larger than the capital that is actually available.

This allows a wide variety of strategies to be applied to the market that are not possible in classic spot trading. Not only the willingness of the trader to take risks plays a role here, but also the technical conditions at the trading venue of their choice.

PrimeXBT provides the best framework conditions

PrimeXBT has focused on offering traders the best possible trading platform for cryptocurrencies. This includes an excellent engine, but also a high amount of liquidity, which creates the necessary conditions to enable attractive trades.

The account opening is very uncomplicated and the PrimeXBT service makes the onboarding process very convenient. For example, it is not only possible to deposit fiat, but also crypto currencies in order to create the necessary liquidity on the customer account, which is necessary for trading, extremely quickly.

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