1. What is Binance Leveraged Tokens?
Answer: Binance Leveraged Tokens is a financial derivative that is similar in nature to traditional leveraged ETFs. Their net asset value may be greatly worn out by short-term market fluctuations. Long-term holding of Binance Leveraged Tokens is risky and users should minimize the losses by selling the leveraged tokens from time to time.
2. What is the leverage multiplier for Binance Leveraged Tokens?
Answer: The system maintains a target leverage range between 1.25x and 4x.
3. When does Binance Leveraged Tokens rebalance?
Answer: When the market is volatile or the actual leverage multiplier is out of the target leverage range.
4. What is the worst case scenario of holding Binance Leveraged Tokens on a long term basis?
Answer: The value of Binance Leveraged Tokens can become zero (0) and cannot be recovered due to inherent market risks, high fees, slippage, rebalance algorithm frontrunning and any other perceived unknown risks associated with Binance Leveraged Tokens.
5. Which one of these fees is NOT associated with Binance Leveraged Tokens?
Answer: Asset custody fees.
6. Which one of these is NOT a cost associated with holding Binance Leveraged Tokens?
Answer: Profit sharing fees.
7. By trading Binance Leveraged Tokens, you do not need to maintain margin maintenance and worry about the liquidation risk. However, Binance Leveraged Tokens is not completely risk-free.Which one of these is NOT a risk associated with holding Binance Leveraged Tokens long-term?
Answer: Receiving interest payment.
8. Why are subscription and redemption of Binance Leveraged Tokens not recommended during normal trading time?
Answer: Subscription and redemption fees are higher than trading fees and there is a limit on how many leveraged tokens users can subscribe or redeem daily.
9. Which one of these actions is NOT required to complete before trading Binance Leveraged Tokens?
Answer: Opening a Margin Account.
10. What would a responsible trader likely do, if they incur consecutive losses?
Answer: Cut losses timely and control risk exposure.
11. As a leveraged tokens trader, you should fully understand the risks associated with leveraged tokens trading and solely responsible and liable for any losses associated with trading activities on your account.
Answer: Yes, I agree.
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