In the cryptocurrency circle, people sometimes say 'the end of contracts is liquidation' and 'it is not recommended for beginners to play with contracts', so what exactly do contracts refer to? Why do people clearly speak cautiously but still eagerly open positions?
In fact, a contract refers to a type of financial derivative that allows users to trade price fluctuations through leverage without holding real assets.
For example, you have 20,000 USDT and then open a 10x BTC contract.
If the price of BTC rises from 20,000 to 22,000, normally, if it were spot trading, you would earn 2000 USDT.
However, because you opened a 10x contract, you would earn 2000 ✖️ 10 = 20,000 USDT, which is why everyone is eager to participate.
But suppose BTC drops from 20,000 to 18,000.
If it were spot trading, you would lose 2000 USDT, but with contracts, you would lose 10 times that, which is 20,000 USDT. This is what is known as liquidation. This is also why people say the end of contracts is liquidation.
Paloo believes that the risks of contracts are too high, and it is not recommended for beginners to operate without some control over news and analytical ability in technical aspects; contracts are no different from gambling.#币安Alpha上新 $ETH $BTC #Strategy增持比特币 
