What is Short Selling?
Short selling is a trading strategy that allows investors to profit from a decline in an asset's price. It’s particularly useful in bear markets or during market corrections.
How Does Short Selling Work?
- Borrow an Asset: Borrow a cryptocurrency like BTC from a lending platform.
- Sell the Asset: Sell the borrowed asset at the current market price.
- Repurchase Later: Buy back the asset at a lower price to repay the loan.
- Profit: The difference between the selling price and the repurchase price is your profit.
Example:
- BTC price: 100,000 PHP
- Borrow and sell 1 BTC → Receive 100,000 PHP.
- BTC drops to 80,000 PHP → Buy back 1 BTC to repay the loan.
- Profit = 100,000 - 80,000 = 20,000 PHP.
Why Short Sell?
- Profit from Declines: Actively earn during market downturns.
- Amplify Returns: Use leverage to control larger positions with less capital.
- Diversify Strategies: Move beyond traditional “buy low, sell high” approaches.
When Should You Consider Short Selling?
Short selling requires careful market analysis. Consider it in these scenarios:
- Clear Downtrend: Prices break key support levels or moving averages indicate bearish momentum.
- Negative Catalysts: Regulatory crackdowns, project failures, or security breaches.
- Overbought Signals: Technical indicators like RSI >70 suggest a potential pullback.
- Market Euphoria: Irrational price surges due to FOMO (fear of missing out).
How to Execute a Short with Crypto on Credit
Follow these steps to short sell crypto using a lending platform:
Scenario:
BTC price = 5,332,560 PHP. You predict a drop to 5,000,000 PHP. So you plan to collateralize 1000 PHP and borrow 4 times the value of the collateral in BTC
Step 1: Collateralize Assets
Transfer funds from spot wallet to credit wallet as your collateral. You can choose the asset you want to collateralize and the collateral amount.
In this scenario, you choose to collateralize 1000 PHP, which means you need to transfer 1000 PHP from the spot wallet to the credit wallet.
Step 2: Borrow BTC
Input how much of the asset you want to borrow under “Borrow amount”. The maximum amount of funds you can borrow is 4 times the value of your collateral.With 4x max amount, borrow BTC worth:
1000 PHP → 0.00018 BTC, 0.00018BTC*4=0.00072242BTC.
At this time you can see interest and loan processing fee below.
The interest is charged when you repay the loan, and the loan precessing fee is charged immediately.
So the actual amount of assets you have recorded should be 0.000718 (0.00072242 BTC - loan processing fee).
You should also consider the impact of these two fees when measuring your short selling returns.
Step 3: Sell Borrowed BTC for PHP
- Immediately sell the 0.000718 BTC. You can input 0.000718 under “sell amount” → Receive 3830.05 PHP in your credit account.
- Total PHP Now: 3830.05 (from sale) + original 1000 (locked as collateral) = 4830.05 PHP (collateral remains locked until repayment).
Step 4: Buy Back BTC at Lower Price
Closely monitor the market price of BTC/PHP. Once BTC drops to 5,000,000 PHP, buy back 0.00072242 BTC for 0.00072242 × 5,000,000 = 3612.1 PHP. You can input 0.00072242 under “buy amount”.
Step 5: Repay the Loan
- Repay the borrowed 0.00072242 BTC and accrued interest→ Loan is settled. You can choose “direct repay” and input 0.00072242 under repay amount, the corresponding amount of BTC will be deducted directly from your credit wallet balance.
- Your profit will be: Proceeds from sale - cost of purchase = 3830.05 PHP - 3,612.1 PHP = 217.95 PHP profit.
Exclusive Promotional Offers
Take advantage of these limited-time offers to maximize your trading potential:
- PHP Loans: 80% Discount (0.001%/hr)
- Valid until February 28, 2025.
- Ideal for short selling with reduced borrowing costs.
- ETH/XRP/SOL Loans: 0% Interest
- Valid until March 3, 2025.
- Borrow ETH, XRP, or SOL interest-free to diversify your trading strategies.
- LTC/PEPE/DOGE Loans: 0% Interest
- Valid until March 11, 2025.
- Borrow LTC, PEPE, or DOGE interest-free to diversify your trading strategies.
Why Use These Offers?
- Lower Costs: Save on interest and fees, increasing your profit margins.
- Flexibility: Access multiple cryptocurrencies for short selling or other strategies.
- Limited Time: Act now to lock in these exclusive rates.
Conclusion
Short selling is a powerful tool for profiting from market declines, but it requires careful planning and execution. By leveraging platforms offering discounted PHP loans and 0% interest on ETH/XRP/SOL loans, you can maximize your returns while minimizing costs.
Don’t miss out! Start short selling today and take advantage of these exclusive offers before they expire.
