Contracts are something that many people find daunting. How to do contracts well? Today, I will share a simple question regarding contracts:

Option 1: 100U margin with 10x leverage for a position of 1000U;
Plan B: 50U margin with 20x leverage for a position of 1000U;
Is there a difference between the two?
If you look at the profit of a single cryptocurrency, there is no difference between the two; but if it is a loss situation, let's compare:
Plan One: 10x Leverage: If the market price fluctuates by 1%, your profit and loss will be 1% of the position × 10 = ±10U (10% of the margin of 100U).
Plan B: 20x leverage: If the market price fluctuates by 1%, your profit and loss will be the position's 1% × 20 = ±20U (which is 40% of the margin of 50U).
Looking at the liquidation distance:
Option 1: 10x leverage: A 10% reverse price fluctuation (100U ÷ 1000U) will result in a total loss of margin;
Plan B: 20x leverage: A price reverse fluctuation of only 5% (50U ÷ 1000U) will result in total loss of margin.
Is that so? Then wouldn't it be enough to just use Plan A to open a position? But what if you only have 1000U and want to open multiple positions?
Plan One: A single position of 100U, theoretically, you can open positions for up to 10 different cryptocurrencies with 1000U.
Plan B: A single position of 50U, theoretically up to 20 positions can be opened for 1000U across different cryptocurrencies.
Summary: Plan A has stronger risk resistance than Plan B, but if the principal is limited and one has a strong ability to grasp market trends and wants to trade more currencies, then Plan B is more suitable!
Trading cryptocurrencies is not only a contest of technology and luck, but also a test of mindset and wisdom. Only those who master these iron rules and strictly adhere to them can stand invincible in the crypto world! The trends in the crypto market are full of uncertainty and challenges, so it is essential to remain calm and rational, responding to market changes with a steady strategy.