How to make money with a negative rate of -2

Today, there are two particularly classic examples: one is LPT and the other is WCT.

LPT has a rate of -2, making money by going long.

LPT on the Korean exchange has started a surge. This wave of increase was caused by expectations from the Korean exchange, followed by retail investors' FOMO emotions, leading to a significant rise in LPT. Retail investors saw LPT surge by 50% and all went short, causing the rate to directly hit -2%, resulting in the LPT contract price being significantly lower than the spot price.

At this time, Binance announced a change in the rate adjustment time limit, from collecting every 4 hours to every hour. This is the best time to open long positions in LPT contracts. Due to the surge in retail short positions, the price difference between the contract and the spot price became too large, causing the market to produce a short squeeze, and the contract price would suddenly rise closer to the spot price.

WCT has a top rate, making money by going short.

Why is WCT's top rate of -2 profitable for shorting? Because this -2 rate is not caused by retail investors going short, but by the market makers building a large number of short positions at high levels.

WCT is a coin controlled by market makers, which is significantly different from LPT's rise. The market makers hold a large amount of chips in WCT, shorting at high positions and then selling in the spot market.

Many retail investors see WCT's -2 rate and go long to earn the rate, often resulting in losses.

The market maker behind WCT also tested a round of selling earlier, then pulled it back, which is quite manipulative.

When to build a short position? A characteristic sign is that one can establish a short position when WCT falls below the moving average.

Another particularly important point is that the contract price will be much lower than the spot price. At this time, one can boldly establish a short position. Don't be afraid to build a position just because the contract price is far below the spot price, as this price is caused by the market makers establishing a large number of short positions.

It can be seen that the reason for the contract price being far below the spot price is actually due to who established the positions: market makers or retail investors.

If retail investors build short positions, then retail positions will be squeezed. That's why LPT surges.

If market makers build short positions, then they keep selling in the spot market, which is why WCT keeps plummeting.