“Since retail users are more likely to FOMO in with more leverage than seasoned traders, Nexo has taken a measure of limiting the risk for the user by allowing leverage only up to 3x”
Nexo has introduced a leveraged product for retail clients that allows users to access up to 3x leverage using the Nexo App.
According to the firm, Nexo Booster has some features similar to margin trading but offers an intuitive interface and imposes strict collateral requirements.
“Unlike speculative futures trading, however, the Nexo Booster imposes strict collateral requirements. The product unites Nexo’s flagship credit lines and the company’s instant crypto exchange and is equipped with a profit projection feature which allows the user to monitor the effect of the market’s future moves in real time”, said the official announcement. a
The 3:1 leverage increases both the risk and opportunity for retail investors looking to gain higher exposure to the already volatile markets within the crypto asset space.
Available on Nexo’s mobile application, Nexo Booster offers a number of advantages, including a fully collateralized position, exchange cashback, high limits, and a multi-asset approach. The list of benefits is as follows:
• Fully collateralized position: LTV of up to 70%. Strict collateral requirements, no double standards – Nexo never lends on an uncollateralized basis.
• Intuitive UI: Allows users to manage their positions easily with Nexo’s intuitive platform. Users can boost their positions and borrow within the same flow in a simple process.
• Exchange cashback: Up to 0.5% cashback on the full amount of the transaction.
• Leverage up to 3x: Allows users to quickly and easily boost their exposure to crypto with up to 3x leverage = buying 3 times more crypto assets with the funds they currently have.
• High limits: Up to $250,000 available per single boost transaction.
• Multiple-asset approach and easy price prediction: Boost the profit on the most promising digital asset by choosing from the nearly 20 cryptocurrencies available on Nexo and track future price moves to calculate your potential profit.
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125x leverage is unsustainable
Long-term-focused retail users who are comfortable with Nexo’s credit lines and wish to use leverage to amplify the impact of their positions by borrowing additional funds are the target customer. The downside of borrowing funds to trade over the long term is the inherent interest charged daily while the order is open.
“Since retail users are more likely to FOMO in with more leverage than seasoned traders, Nexo has taken a measure of limiting the risk for the user by allowing leverage only up to 3x, as opposed to professional exchanges where leverage can go as high as 125x. It’s a sustainable leverage product made for those people who believe in the long-term upside potential of digital assets”, the firm explained.
Extremely high leverage on crypto markets is indeed a risky business as 125 times one’s account balance is likely to blow it up, particularly when trading the most volatile asset class there is.
Nexo has ensured it never lends on an uncollateralized basis in order to protect both the company and the user. The service respects the values of security and usability and can help its users not only increase their profits but also diversify their portfolios without deploying additional capital.
The firm offers tax-efficient Instant Crypto Credit Lines™, a high-yield Earn Crypto Interest suite, an instant Exchange service, and sophisticated trading and OTC capabilities. Nexo has processed $75+ billion for 3,000,000+ users across more than 200 jurisdictions.
