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GateUser-e77eb9bb

$UB3S the original coin dropped by 8% yet this etf short 3 is on negative when it shld be rising. why @gateio

UB3S0.42%
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XiaoJia
· 10h ago
Dear users, during the significant drop in the 5L price and the lack of the expected rise in 5S, this is a normal phenomenon of ETF leverage, not market manipulation. It is the result of wear and tear amplified under multi-day volatile trading, not that the short products didn't go up, but that both long and short products are being worn down.
For example:
Day 1: BTC rises 10% (price to 110)
Day 2: BTC falls 10% (price to 99)
Day 1: BTC5S return = (+10%) * (-5) = -50%. Net value becomes 100 * 0.5 = 50 USDT
BTC5L return = (+10%) * (5) = +50%, net value becomes 100 * 150% = 150 USDT
Day 2: BTC5S return = (-10%) * (-5) = +50%. Net value becomes 50 * 1.5 = 75 USDT
BTC5L return = (-10%) * 5 = -50%, net value becomes 150 * 50% = 75 USDT
Final result:
BTC price from 100 -> 99, almost unchanged (only a 1% drop).
BTC5S and 5L both go from 100 -> 75, losing 25%, with prices trending downward.
This 25% loss is the wear and tear caused by the volatile market.
Please note: the actual product performance will also be affected by management fees, market trading, rebalancing costs, and other factors; data may not be as idealized as in the example.
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