MEXC is one of the modern crypto exchanges favoring altcoins and giving other players like Binance a big run for their money. For many reasons, MEXC deserves every bit of attention it’s enjoying from crypto users. The platform appears to bridge the crypto gap in many territories. For example, US citizens can use this exchange, which was impossible to do with the likes of Binance following the 2019 ban.
Furthermore, MEXC offers more than a casual exchange experience. The platform aims to provide its users with a holistic feel of trustworthy transactions and trading activities. In addition to earning a high trust score from CoinGecko, MEXC also offers an easy onboarding process and is fast and reliable.
The exchange platform has a series of investment and trading opportunities which include
- OTC Trading
- Other Derivatives
- Options and Futures
- P2P Sales
Our focus in this piece would be on how to use MEXC’s ETF.
What are ETFs?
ETFs are a class of securities that users can trade on centralized exchanges. There are different types of ETFs. Furthermore, ETFs are an important option for investors who want to diversify their portfolios. So, like normal stocks, users can trade ETFs during trading hours since they are listed on regular stock exchanges.
In addition, ETFs are tokens that have a leverage feature that allows them to provide leveraged multiple yields against perpetual contracts. Users can also trade them directly in the spot market without having to pay for margin or risking liquidation. Leveraging is an investment strategy in which borrowed funds are used to purchase options and futures in order to boost the impact of price mobility.
Here are some advantages of leveraged ETFs.
- Leveraged ETFs have the potential to outperform the underlying index by a large margin.
- Leveraged ETFs allow investors to trade a wide range of securities.
- Inverse leveraged ETFs allow investors to profit when the market is falling.
Leveraged ETF Characteristics and Benefits
Leveraged ETFs come with a series of characteristics and advantages that make them appealing to investors. Here are some characteristics of leveraged ETFs:
- No margin Required:
Leveraged ETF tokens are denominated in USDT and the trading mechanism is similar to spot trading. The process does not require any extra effort.
- Compound interest effect
Leveraged ETFs will continue to reinvest daily profits in an unstable market. This way, leveraged ETFs hold more profit than other contracted or leveraged products.
- Risk control
It is worth noting that the leverage of ETFs is automatically adjusted. So, risk adjustment is one advantage and characteristic leveraged ETFs have over other products. Furthermore, to avoid liquidation, the leveraged ETF will simply reduce part of the position and adjust the leverage to the initial leverage if the deficit reaches a critical threshold.
Here are some advantages of leveraged crypto ETFs:
- Support 2-5 times leverage with controlled risk: many leveraged tokens support 3x long and 3x short while some mainstream tokens support 2x, 4x, or even 5x leverage.
Users can select from a variety of tokens, including altcoins, mainstream ETFs, and hotspot ETFs.
- Low Fees and charges: Everyone loves to spend less on fees, and crypto-leveraged ETFs offer exactly that. Trading ETFs have a transaction fee of 0.2% and a daily management fee for every multiple of leverage.
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Using MEXC ETF
Generally, ETF products are represented by cryptocurrency + leverage + long or short direction. For example, BTC3L represents a long position of BTC with three times leverage, while ETH3S represents a short position of ETH with three times leverage. So, when the BTC price increases by 1%, BTC3L will rise by 3%. Conversely, BTC3S will fall -by 3%. Then, when BTC falls by 1%, BTC3S will rise by 3% and BTC3L will fall by 3%.
The MEXC ETF also tracks the price movement of any given underlying asset with an amplitude of 2-5 times the asset, similar to ETF products in traditional finance.
How to Trade ETFs on MEXC
Here are a few steps to getting started with ETF trading on MEXC.
- Log into MEXC.
2. Click on Leveraged ETF on the top menu bar. Ensure you read the disclaimer that pops up and click on the “I have read and agreed” button.
3. Afterward, you’ll see a list of ETF products that MEXC supports on the right. You can also use the search button to select your desired product.
4. Using BTC3L as an example, you can select limit or stop limit to buy or sell.
5. After placing an order successfully, you can view the order status in the “limit order” and “stop limit ” orders at the bottom of the page.
Check out MEXC’s Telegram channel for more information.
Join the MEXC Referral Program
MEXC Global is debuting a referral program for all ETF Community Partners. This is to enable more users to experience leveraged ETF products. Furthermore, via this program, the exchange platform intends to trigger more brand awareness and an active community. The program began on February 10th, 2022.
However, to be eligible, ETF partners need to have no less than 500 active social media followers. So, they’ll need to devote time to staying active in the MEXC community.
The image below shares details of some of the benefits to partners. Additionally, partners can get up to 10 USDT rewards for each new eligible user that joins. Lastly, this is capped at 500 USDT monthly.
Also, partners only have to share exclusive posters or links in the MEXCapp. To do this, they have to visit the [Profile]-[ReferralReward] or [Profile]-[InviteFriends] on the website. For more information, visit the MEXC website.
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