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

Leverage multiplies the move: 5% × 10 = 50% of your margin.

Question 2

In futures trading, 'liquidation' happens when:

Accepted Answer

Margin can no longer cover position losses

Answer

Liquidation forcibly closes a leveraged position once losses exceed maintenance margin.

Question 3

A 'long' position profits when the asset price:

Accepted Answer

Rises

Answer

Going long means you profit as the price increases.

Question 4

What is the 'funding rate' in perpetual futures?

Accepted Answer

A periodic payment between longs and shorts

Answer

Funding rates are periodic payments that keep the perpetual price near spot.

Question 5

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

Accepted Answer

Position sizing / risk management

Answer

Capping risk per trade is core to disciplined position sizing.

Crypto Trading Practice Test