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Trying to understand the risks with BTCUP (and leveraged tokens in general)

Binance

Cryptocoins Exchanges / Binance 380 Views

Suppose someone would have acquired some BTCUP in may 2020, where they were about 9 usdt. Could she/he have simply hold them for a year and sell them today at around 135?

Up to my understanding (referring to any leveraged token, not just the particular example of BTCUP):
- since a year has passed, she/he would have lost 3.5% of the initial amount to maintain the position
- volatility drag would have made the token behave not very well if there wasn't a well defined trend
- there is no risk of liquidation

Is there any important point I'm missing about leveraged tokens?

submitted by /u/NDXP
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