BUY AND SELL
By CoinTradeUp Team
published in September 12, 2024
On CoinTradeUp, learn how to master buying, selling, and even short-selling cryptocurrencies—without any fees or real risk. Manage a virtual portfolio, take advantage of real-time prices, and explore advanced strategies. Develop your crypto trading skills before moving on to real markets, all with complete peace of mind.
With CoinTradeUp, you can buy and sell cryptocurrencies virtually from your virtual portfolio or as part of competitions.
Buying
The most classic and well-known case is buying a cryptocurrency and then selling it.
The difference between the selling price and the purchase price allows you (or not) to make a profit, or a loss if the sale is made at a price lower than the purchase price.
The most classic and well-known case is buying a cryptocurrency and then selling it.
The difference between the selling price and the purchase price allows you (or not) to make a profit, or a loss if the sale is made at a price lower than the purchase price.
In the case of buying (then selling), you are assuming that the price will rise. Thus, you are "betting" on an increase in the value of the underlying asset.
Short Selling
However, CoinTradeUp also offers short selling. This means you are selling a cryptocurrency before having bought it.
In reality, for this type of operation, the platform or the bank compensates by purchasing on their side the assets you wish to short sell. Due to the nature of the operation, a commission is usually charged by the intermediary.
However, CoinTradeUp also offers short selling. This means you are selling a cryptocurrency before having bought it.
In reality, for this type of operation, the platform or the bank compensates by purchasing on their side the assets you wish to short sell. Due to the nature of the operation, a commission is usually charged by the intermediary.
On CoinTradeUp, there are no commissions! Being a simulator, CoinTradeUp allows you to easily perform short sales, limited only by the virtual funds available in your virtual portfolio.
Indeed, when you short sell, since you have not yet purchased the assets, your virtual cash account is not debited.
However, you have an engagement corresponding to the amount of your sale.
When you buy back the cryptocurrency, CoinTradeUp calculates the difference between the selling price and the repurchase price, allowing you to make a profit or a loss.
However, you have an engagement corresponding to the amount of your sale.
When you buy back the cryptocurrency, CoinTradeUp calculates the difference between the selling price and the repurchase price, allowing you to make a profit or a loss.
In the case of a short sale (then a buyback), you are assuming that the price will fall. Thus, you are "betting" on a decrease in the value of the underlying asset.
On CoinTradeUp, everything is possible!
You can split your purchases or short sales over time (i.e., space out your buying or selling operations). You can also sell more than the amount you previously bought, which means:
You can split your purchases or short sales over time (i.e., space out your buying or selling operations). You can also sell more than the amount you previously bought, which means:
- Selling the assets you had previously bought.
- Executing a short sale on the additional quantity.
Of course, all this is possible within the limits of the available cash in your virtual account.
Okay, but at what price are my transactions executed?
See the different types of orders available on CoinTradeUp.
See the different types of orders available on CoinTradeUp.
How does the engagement work in the case of short selling?
The engagement is a blocked sum that accounts for your short sales.
In the case of a short sale, you are selling assets before having bought them. Your virtual cash account is not debited, but the amount used for the sale is locked in your engagement.
When you buy back the assets, the engagement disappears, and your virtual cash account is credited with the profit made (or debited with the loss if you bought back your assets at a higher price than you sold them short).
The engagement is a blocked sum that accounts for your short sales.
In the case of a short sale, you are selling assets before having bought them. Your virtual cash account is not debited, but the amount used for the sale is locked in your engagement.
When you buy back the assets, the engagement disappears, and your virtual cash account is credited with the profit made (or debited with the loss if you bought back your assets at a higher price than you sold them short).
Let's take an example, with a cash balance of €100,000 in your virtual portfolio:
- I short sell €5,000 of Bitcoin.
- The engagement equals €5,000 (price at €50,000, quantity = 0.1).
- The cash balance of the virtual account remains at €100,000.
- Bitcoin drops, and you buy back everything for €4,000 (price at €40,000, same quantity = 0.1).
- The engagement is now €0 since you no longer have any short-sold assets.
- The cash balance increases by €1,000 (the difference between the purchase amount and the sale amount – a profit is made).
WARNING: When you perform short sales that increase your engagement, this amount is considered when determining your future investment capacity.
This means that:
This means that:
- If you have a cash balance of €100,000 and an engagement of €50,000, you will not be able to buy more than €50,000 (balance – engagement).
- If you have a cash balance of €20,000 and an engagement of €5,000, your investment capacity (for purchases or short sales) is limited to €15,000.
Happy Trading!
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