Many people don’t understand what spot, contract, leverage, long, short, liquidation, position closing and position closing mean in the cryptocurrency circle.

1. Spot: Buy the coin directly and sell it when it rises to make money.

2. Contract: Buy the derivative of the coin. By judging the future market rise and fall, choose to go long (buy up) or short (buy down) to earn the rising/falling income.

3. Leverage: Used with contracts to increase the multiple. The more leverage multiples, the more you earn, and it is proportional to the risk. The higher the multiples, the greater the risk, and the lower the multiples, the lower the risk.

4. Long (long): Buy bullish when you think it will rise later. Income = principal × increase × leverage multiple. Loss = principal × decrease × leverage multiple.

5. Short (short): Sell bearish when you think it will fall later. Income = principal × decrease × leverage multiple Loss = principal × increase × leverage multiple. 6. Liquidation: Long liquidation: The principle of long orders is to be bullish on the future market, borrow money to buy first, sell at a high price when it rises to make a profit, pay back the borrowed funds, and the rest is profit. If a long order encounters a falling market, the loss will be forced to close when it reaches the account margin, and the money in the account will be directly cleared. For example, at a certain price, you think it will rise in the future, so you open a 10x long position, that is, the long money is ten times the margin. Your margin is 10,000 U, and 10x long is equivalent to the exchange lending you 90,000 U first. You use this 100,000 U to open a long position. The price of the currency has fallen by 10%, which is equivalent to a loss of 10,000 for opening a position of 100,000, and your principal is only 10,000, and the remaining 90,000 is borrowed. In order to prevent you from not being able to pay it back, the exchange will forcibly take back the 90,000 lent to you, and because you have already lost 10,000, there is no money in the account, and it is zero. This is a long liquidation. Short position explosion: The principle of short position is to be bearish on the future market. First borrow coins to sell, and then buy the same coins at a low price when the price drops and return them to the lender. The remaining money is the profit. If the short position encounters a rising market, and the money previously borrowed to sell is not enough to buy back the same number of coins at a high price, it will be forced to buy back. At this time, the price of the coin is higher than the opening price. Your principal plus the loan can only buy back the same number of coins. After returning the coins, your money is gone. For example, if you short a certain currency at a price of 10,000 U, and your margin is 10,000 U, it is equivalent to the exchange lending you 9 coins worth 90,000 U at this time plus your one coin worth 10,000 U, a total of 10 coins. You sell first