Crypto Trading Review and Assessment 4

Question 1

Using 10x leverage, a 5% adverse price move results in approximately what loss on margin?

Accepted Answer

50%

Answer

5%

Answer

10%

Answer

15%

Question 2

In futures trading, 'liquidation' happens when:

Accepted Answer

Margin can no longer cover position losses

Answer

You voluntarily close at a profit

Answer

The exchange lowers its fees

Answer

A new block is mined

Question 3

A 'long' position profits when the asset price:

Accepted Answer

Rises

Answer

Falls

Answer

Stays flat

Answer

Is delisted

Question 4

What is the 'funding rate' in perpetual futures?

Accepted Answer

A periodic payment between longs and shorts

Answer

The exchange listing fee

Answer

The mining reward

Answer

The withdrawal limit

Question 5

Risking no more than 1-2% of your account per trade is a principle of:

Accepted Answer

Position sizing / risk management

Answer

Maximizing leverage

Answer

Tax avoidance

Answer

Arbitrage

Question 6

A risk/reward ratio of 1:3 means:

Accepted Answer

Risking $1 to potentially gain $3

Answer

Risking $3 to gain $1

Answer

A guaranteed triple return

Answer

Three trades per day

Question 7

Shorting a cryptocurrency exposes a trader to:

Accepted Answer

Theoretically unlimited losses if price rises

Answer

Zero risk

Answer

Only the funding fee

Answer

A capped 100% loss only