Why do so many people like to trade contracts in the crypto space?
Because it can make you rich overnight and you can profit from both rising and falling markets.
With a small investment, you can make a big return.
Here's an example if you're on the right track:
For instance, if you have 100u, buying spot only allows you to purchase coins worth 100u. If the price rises by 10%, you earn 10u.
But contracts are different: For example, if you have 100u and you use 10x leverage to go long, it's equivalent to having 1000u.
This means you can buy 1000u in spot. If the price also rises by 10%, you earn 100u, doubling your capital.
Another example: If you have 100u but you're bold enough to use 100x leverage to go long, it's equivalent to having 10000u. You can buy 10000u in spot. If the price rises by 10% again, you directly earn 1000u, increasing your capital by 10 times.
So, while your initial capital is still 100u, the returns are vastly different.
This is the charm of contracts.
