Not long ago, when visiting the outlets with her girlfriend, she fell in love with a skirt. Although she did not say anything, she looked at the skirt, the time she stayed, and the small details that she looked back many times after she walked out of the store. It can be judged that she likes that skirt very much. Maybe because of the price, she didn't mention buying from the beginning to the end. I looked at the price of the skirt, which was more than 20,000 yuan. This price is indeed a bit luxurious for us who have only been working for two or three years.
My girlfriend and I have been together for more than 3 years. Since we met, she has never liked something so much. For the past three years, she has worked hard with me and will cook for me and wash clothes every day after get off work, no matter how tired I am. I am very fortunate that I can find such a gentle and virtuous girlfriend. At the same time, I feel guilty that I can't give her a better life. It’s been my girlfriend who has always been giving and giving me a surprise. This time I am giving her Surprise, thinking that it will be Valentine’s Day in a few days. If I buy that dress for her, she will be very happy, so I Decided to make enough money in a short time to buy her a skirt.
In order to quickly earn enough money for the skirt, I tried to play Bitcoin contracts for the first time. I had been speculating on the spot before. This time I thought about the time constraints and played a few contracts to quickly earn enough money for the skirt, so I stopped immediately. But who knew this operation, he was driven to a dead end.
On August 17, Bitcoin broke through the strong pressure level of 12,000 US dollars and rose to 12,448 US dollars, a new high in 2020. After breaking through US$12,000, the 1-hour and 4-hour K-lines were collectively staged, and the MACD indicator rose simultaneously. I predict that Bitcoin will continue to rise, so I opened a bitcoin contract with US$5,000 and made a 20-fold full position. In the next hour, Bitcoin rose to 12,448 U.S. dollars, an increase of nearly 4%, and I made nearly 4,000 U.S. dollars.
The first time I played the contract, I made 4000 US dollars so easily. Buying a skirt is more than enough, but I didn't stop immediately, but wanted to take advantage of the market and make a lot of money. So after closing the position, I increased the position to 10,000 US dollars, increased the leverage, and continued to go long by 100 times. But when I opened the order, Bitcoin not only did not rise, but plummeted all the way, from 12,448 US dollars to 11,380 US dollars, a drop of nearly 9%.
In order not to let myself liquidate, I only continued to increase the margin, and eventually the liquidation was touched due to insufficient margin. As a result, I lost the 300,000 deposits that my girlfriend and I had worked so hard to save over the past three years. I also maxed out 200,000 credits in several credit cards. This is good, and a total loss of 500,000.
Today my girlfriend called me a few times, but I didn’t dare to answer. I don’t know how to tell her about this. I don’t know how to live this Chinese Valentine's Day? At this moment, I was so desperate to jump off the building. I wanted to find someone to vent my grief. So I dialed a small phone and told him about the loss of 500,000 in the contract. He sighed after listening. : You are too stupid. As an old leek in the currency circle, I need to advise you that under high leverage, the direction of the contract is wrong. The most sensible way is not to call margin, but to hedge, so as to recover the contract loss.
I asked him how to hedge? He gave me an example:
The current price of Bitcoin is $10,000
1. Suppose you use 2,000 yuan to open 20 times leverage to go long
2. At the same time, open a put option to hedge on BitOffer (cost of $20)
✅The first type, when Bitcoin rises by $500, the increase is 5%
1. Go long with 20 times leverage and make 100% profit, which is 2,000 yuan
2. The put option loses the principal, which is 20 US dollars (140 yuan)
3. 2000-140=1860 yuan (net profit)
✅The second type, when Bitcoin falls by 500 US dollars, the drop is 5%
1. Go long with 20 times leverage, the contract will be liquidated and a loss of 2,000 yuan
2. Put option profit of 500 US dollars, which is 3,500 yuan
3. 3500-2000-140=1360 yuan (net profit)
Note: Open the hedging strategy, the contract hits the liquidation, the account is still profitable
After hearing about his hedging method, I regret it in my heart. Why didn't I expect to start option hedging at the time? If you use the option hedging method, instead of blindly calling for margin, you will not lose so much money. After all, I blame myself for being too greedy. When I first made $4,000, if I stopped in time, I wouldn't have reached the point of liquidation. Now it's too late to say anything.
Still think about how to explain to my girlfriend, how will I live this Chinese Valentine's Day? Who can tell me?