Recently, a trader earned a daily profit of more than $1.4 million by trading JASMY3L on MEXC. According to the ETF Rank data on MEXC, the trader had bought the JASMY3L (3x buy long for JASMY) and earned a daily profit of more than $1.4 million on May 17. Moreover, the trader’s maximum floating profit was at one point more than $3 million.
How did the trader earn this much?
In fact, the trader bought JASMY3L at around $0.8 on May 15 on MEXC. Then, on May 17, the price of JASMY3L reached $2.875, the highest price on that day, which helped the trader enjoy the highest gains of 259%.
JASMY3L Gains
JASMY Spot Gains
During this period, the spot price of JASMY only rose from 0.0091 to the highest of the day, 0.01596USDT, with the highest gains of only 75.38%. At the same time, the gains of JASMY3L were much higher than JASMY’s spot gains. How does this happen? This has got to do with MEXC’s product, the leveraged ETF.
The leveraged ETF on MEXC is a perpetual leverage product that magnifies the price changes of a benchmarked asset. The product aims to provide leveraged gains of the benchmarked perpetual futures. The name of Leveraged ETF is usually expressed by ‘cryptos + leverage + long/short direction’. For example, JASMY3L indicates a 3x long for JASMY, while JASMY3S indicates a 3x short for JASMY. If the price of JASMY rises by 1% on a particular day, JASMY3L will rise by 3%, while JASMY3S will fall by 3%.
The leveraged ETF has advantages which are far better than spot and futures products.
- First of all, trading leveraged ETFs is easy and almost the same as trading spots. It does not require a portion of positions as the margin, resulting in a higher capital utilization and does not have liquidation rules.
- Second, the leveraged ETF gains are higher than that of the spot and futures of the same multiple. For example, a 3x long futures for BTC will have smaller gains than that of a 3x long ETF for BTC.
This is because the leveraged ETF has a rebalance mechanism, which provides a compound interest effect. When the market price fluctuates, the daily profits will be automatically transferred into the position and generate interest by reinvesting. Thus, its profit is higher than the margin or futures products with the same multiple. - Third, compared to the futures products, the highest leveraged multiple of leveraged ETF products is only 4 on MEXC. For example, BTC 4L/4S is relatively low-risk and suitable for traders who favor a medium or low-risk trade.
Among the similar ETF products, MEXC’s leveraged ETF ranks 1 in daily trading volume on the internet.
The leveraged ETF on MEXC is currently the product with the highest number of trading categories among other similar products on the internet. It supports more than 400 types of crypto assets and is currently ranked 1 among other ETF products in daily trading volume on the internet.
However, please note that:
- Due to the rebalance mechanism, the leveraged ETF will cause fee rate erosion and thus are not suitable for long-term holders.
- The leveraged ETF is suitable for unilateral market trends. For example, we can buy BTC3L at a low price in a unilateral uptrend and buy BTC3S at a low price in a unilateral downtrend. However, it is not suitable to trade the leveraged ETF in an oscillating market.
- It is not suitable for high-frequency trading as it can result in transaction fee erosion.
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Established in April 2018, MEXC is a digital asset trading platform with over 7 million users, which offers users one-stop services, including spot, margin, leveraged ETFs, derivatives trading and staking services. The core members of the team come from international enterprises and financial companies and have experience in blockchain and financial industries.
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