🍀In futures contracts, no new value is created, nor does money disappear "into thin air"; rather, it is a direct transfer of wealth between traders.
🔹 The basic mechanism:
When you lose in a trade, the other party who took the opposite direction is the one who profits.
Example: If you open a Long position on Bitcoin and the price goes down, you lose, while the trader who opened a Short position profits the same amount (minus fees).
🔹 Leverage increases the size of the transfer:
If you use a leverage of ×10, for example, any movement of 1% against you means a loss of 10% of your capital, and this amount is directly transferred to the winning trader or held by the platform as collateral and redistributed.
🔹 Where does the money actually go?
1. To other traders:
Losses are distributed to the winners; this is the essence of futures contracts.
2. To the platform through fees:
Every trade carries a small commission (opening/closing/financing). Even if one party wins and the other loses, the platform always earns its share.
3. To the Insurance Fund:
In some cases, if a losing account is liquidated very quickly and the margin is insufficient, the platform compensates the winners from the "Insurance Fund," which is in turn fed by funds from previous liquidation cases.