After the FUD and statement of CZ (CEO Binance) that he is letting go of +$500M of FTT. It could be wise to know potential risks of a possible bank run or insolvency of FTX exchange.
Not saying this is going to happen but no one knows the future. Anyway, extreme volatility, and unpredictable price swings to the downside could be the result of this.
Traders can attempt to take advantage of this volatile nature by short selling FTX Token – FTT. However, short selling is not for beginners and can be risky.
Can FTX Token – FTT Be Shorted?
Yes. You can short FTX Token – FTT price by betting against it using derivatives. However, you have to know the risks associated with shorting especially when using leverage.
What is shorting FTX Token – FTT?
When you short a token, in this case FTX Token – FTT, the aim is to sell the cryptocurrency at a high price and buy it back lower. In contrast to the ‘buy low and sell high’ principle, short sellers aim to ‘sell high and buy low’.
When you are correct and the price drops, the FTX Token – FTT trader profits from the price movement between when they sold the asset, and when they bought it back.
Where can I short FTX Token – FTT?
You can short FTX Token – FTT on a futures market on Gate. This is a market where you buy/sell a contract, which specifies when and at what price the token will be sold.
If you sell this futures contract, it suggests a prediction that FTX Token – FTT will decline in price. You can short FTX Token – FTT with contracts that bet on a lower price for the token. Learn more about futures markets here.
Where can I short Solana – SOL?
Alternatively, if you want to capitalize on the decline of Solana – SOL. You can decide to short the main Sam token. The steps to short Solana are the same as done with FTX Token – FTT.
You’re betting the price will go down so remember any price movements to the upside could be negative for your earnings.
What Are the Risks of Shorting FTX Token – FTT?
There are risks when you try to short FTX Token – FTT. It could be that price moves in the opposite direction, therefore it could be difficult to accurately predict the price movement.
On top of that, users need to use the futures market when shorting, where trading platforms allow the use of leverage or borrowed money to place orders on the decline of the FTX Token – FTT price. However, the use of leverage can magnify gains and losses.
