1. What is Boosted Trading?
Boosted Trading lets you take a ‘long position’ in a player’s stock by only paying 20% of the actual stock value. It magnifies your purchasing power, enabling you to maximize your investment in player stocks.
2. How Does It Work?
Normal Trading: If you’re buying a stock of Virat Kohli priced at Rs.100, you’d typically pay the full amount.
Boosted Trading: With our new model, you only pay Rs.20 (20% of Rs.100) for the same stock. So, with Rs.100 in your Sportiqo wallet, you can buy stocks worth up to Rs.500.
3. Understanding Profits and Losses:
Profits: If you buy 10 stocks of Virat Kohli at Rs.100 each (total Rs.1000) using Rs.200 (20% margin), and his stock price rises to Rs.150, your 10 stocks are now worth Rs.1500. This means your Rs.200 turns into Rs.700—a whopping 250% increase!
Losses: However, if Kohli’s stock price drops to Rs.90, the total value of your stocks is now Rs.900—a Rs.100 loss. Your initial Rs.200 is now only Rs.100, a 50% decrease. A decline to Rs.80 or below results in a complete loss of your Rs.200.
4. The “Stop-Out” Mechanism:
Definition: “Stop-out” is a safety feature activated when a stock’s value plunges critically due to decreasing player stock prices.
Automatic Stock Sale: If your stocks hit the stop-out threshold, they will be automatically sold to avert further losses, safeguarding both you and the platform. This threshold is equal to your initial cash investment in the stock, so in the above example as Virat Kohli price drops by Rs200, it will wipe out your initial investment of Rs. 200 and will trigger an automatic stock sale.
Purpose: The stop-out ensures your losses don’t exceed your initial margin (the first amount deposited to buy the stock). This process prevents users from accruing debt beyond their first deposit, fostering a trustworthy trading environment.