First off, no, I am not trolling, I have actually pondered this question.
Some entities offer in advertising a 10,000x pseudo-leverage on so-called "isolated margin" gaming. Now, I've considered a theoretical scenario:
- I buy some cryptocurrency for, say, 10€, with a 10,000x leverage betting on the price going up.
- Should the price now rise to 10.10, thus by 1%, I would make a profit of 1000€, which is a 100x return.
- Should the price fall by a minimum of 0.01%, to 9.999€, I would lose the 10€ under the "isolated margin" scheme.
Now, one could theoretically execute such a trade with 10 big DAX companies, and if just one of them luckily goes up by 1%, you make a 100x. Of course, you'd also be quickly liquidated with a tiny price movement, but it's enough to be lucky with just one trade and you've made a very high profit.
Am I overlooking anything? It's obviously VERY risky but could be fun to try with a few euros, couldn't it?
Edit: In my case, if the trade is set to be liquidated at a 0.01% loss, it means the position will be closed automatically to prevent further losses. Therefore, I wouldn’t owe the entity offering the arrangement additional funds beyond this predetermined loss threshold. (Isolated Margin)
Important Disclaimer: The scenarios discussed here are purely theoretical and serve only for educational or entertainment purposes. Engaging in high-leverage trading involves significant risk, including the potential loss of your investment. This discussion is not a recommendation or encouragement to participate in such financial activities. Always conduct thorough research or consult a financial advisor before making investment decisions.