Buy JASMYL on MEXC and make over $1.4 million in one day?
A trader recently made a daily profit of more than $1.4 million by trading JASMY3L on MEXC. According to ETF Rank data on MEXC, the trader purchased the JASMY3L (3x buy long for JASMY) on May 17 and earned a daily profit of more than $1.4 million. Furthermore, the trader's maximum floating profit was more than $3 million at one point.
How did the trader make so much money?
In fact, the trader purchased JASMY3L on MEXC on May 15 for around $0.8. The price of JASMY3L then reached $2.875, the highest price on that day, allowing the trader to enjoy the highest gains of 259 percent.
Gains on the JASMY Spot
During this time, the spot price of JASMY rose from 0.0091 to the day's high of 0.01596USDT, with gains of only 75.38 percent. At the same time, JASMY3L's gains were significantly higher than JASMY's spot gains. What causes this? This has something to do with MEXC's leveraged ETF.
MEXC's leveraged ETF is a perpetual leverage product that magnifies price changes in a benchmarked asset. The product is designed to provide leveraged gains on benchmarked perpetual futures. Leveraged ETF is commonly abbreviated as 'cryptos + leverage + long/short direction.' JASMY3L, for example, denotes a 3x long JASMY, while JASMY3S denotes a 3x short JASMY. If the price of JASMY increases by 1% on a given day, JASMY3L will increase by 3%, while JASMY3S will decrease by 3%.
The leveraged ETF provides a number of advantages over spot and futures products.
To begin with, trading leveraged ETFs is simple and similar to trading spots. It does not need a percentage of holdings to be used as margin, leading in increased capital utilization and no liquidation rules.
Second, leveraged ETF gains are greater than spot and futures gains of the same multiple. A 3x long futures for BTC, for example, will have lower gains than a 3x long ETF for BTC.
This is due to the leveraged ETF's rebalancing mechanism, which generates compound interest. When the market price changes, the daily earnings are immediately deposited into the position and reinvested to create interest.
As a result, it generates a bigger profit than margin or futures products with the same multiple.
Third, on MEXC, the greatest leveraged multiple of leveraged ETF products is only 4, compared to futures products. BTC 4L/4S, for example, is low-risk and appropriate for traders who choose a medium or low-risk trade.
MEXC's leveraged ETF has the highest daily trading volume on the internet among similar ETFs.
In comparison to other similar products on the internet, the leveraged ETF on MEXC currently has the most trading categories. It supports over 400 different crypto assets and is presently the most popular ETF on the internet in terms of daily trading volume.
Note:
- The leveraged ETF will have fee rate erosion due to the rebalancing mechanism, making it unsuitable for long-term investors.
- For unilateral market developments, the leveraged ETF is appropriate. In a unilateral rise, we can buy BTC3L at a low price, and in a unilateral decline, we can buy BTC3S at a cheap price. In an oscillating market, however, trading the leveraged ETF is not recommended.
- It is not ideal for high-frequency trading since transaction fees may be eroded.