AscendEX contract short selling tutorial

Short selling in the cryptocurrency market on AscendEX involves selling a crypto asset you don't own, intending to buy it back at a lower price for profit.

Nov 25, 2024 at 02:16 pm

AscendEX Contract Short Selling Tutorial: A Comprehensive Guide

Introduction

Short selling in the cryptocurrency market involves selling a crypto asset that you do not currently own, with the intention of buying it back at a lower price to generate a profit. This strategy can be lucrative, but also carries inherent risks.

Prerequisites for Short Selling

• Sufficient Funds: Short selling requires sufficient funds or margin to cover potential losses.
• Risk Tolerance: Short selling can result in significant losses if the asset price rises. Ensure you are comfortable with the associated risks.
• Trading Platform: AscendEX is a reputable platform that offers contract short selling capabilities.

Step-by-Step Tutorial

1. Open a Trading Account on AscendEX

• Visit the AscendEX website and click on "Sign Up."
• Provide your email address, create a password, and complete the registration process.
• Verify your email address and set up two-factor authentication for enhanced security.

2. Deposit Funds into Your Trading Account

• Log in to your AscendEX account and click on "Deposit."
• Select your preferred deposit method (e.g., bank transfer, credit/debit card, or cryptocurrency).
• Follow the instructions provided to deposit funds.

3. Margin Trading Basics

• Margin Trading: This feature allows traders to borrow funds from the platform to increase their buying or selling power.
• Leverage: Leverage is the ratio of borrowed funds to personal funds. Higher leverage increases both potential profits and risks.
• Calculate Margin: The margin required for short selling is calculated as the maximum potential loss multiplied by the leverage used.

4. Place a Short Selling Order

• Navigate to the "Futures Market" section on AscendEX.
• Select the crypto asset you wish to short sell and click on "Details."

• Choose the "Short" tab and enter the following information:

  • Order Type: Choose between "Market" (fills the order at the current market price) or "Limit" (fills the order at a specified price).
  • Quantity: Specify the number of contracts you want to short sell.
  • Leverage: Select the desired leverage ratio.
  • Symbol: Choose the crypto asset/stablecoin pair being traded (e.g., BTC/USDT).

5. Monitor Your Position and Close the Trade

• Once your short selling order is placed, it will appear in the "My Positions" section.
• Monitor the price movements of the crypto asset and adjust your position if necessary.
• Closing the Trade: To close a short position, place a "Buy" order for the same amount of contracts. The difference between the short selling price and the closing price determines your profit or loss.

Alternative Ways to Short Sell Crypto

Apart from contract short selling, there are other ways to short sell crypto:

• Inverse ETFs: These ETFs track the inverse performance of specific crypto assets, allowing investors to profit from price declines.
• Shorting through Lending Platforms: Some platforms enable users to lend their crypto assets to short sellers, earning interest in return.