Recently, Lina's funding fees have been outrageous, and its open interest has been extremely high. If it goes up any further, it will be a short squeeze.

Let’s talk about why contract shorts are the enemy of spot bulls. Some people always say that the air force is all about fuel. Many people don’t understand why they say this. Isn’t short selling a scam?

First of all, this view is one-sided. Fuel is only needed when Gouzhuang really wants to pull the market. It is useless to fill up the fuel of a car that is not running.

Then talk about why it is reasonable in extreme cases such as lina and pepe.

The contract price will not affect the direct spot price, and will be affected by the funding rate and anchor the spot price. Therefore, the main force only needs to master a certain amount of chips and control the spot price, and then it can pull the price at will.

For an underlying asset like lina, whose contract trading volume is twenty or thirty times that of the spot, the cost of controlling the market is not as high as imagined.

After the short position is blown out, it will become a cheap bargaining chip for the main force. For example, a trader shorts 100 $abc at a unit price of 1 yuan 10 times, that is, using a principal of 100 yuan, he borrows 100 $abc, sells short, and the order is worth 1,000 yuan. When the price was about to reach 1.1 yuan, that is, an increase of 10%, the order exploded. At this time, the transaction was a buy order worth 1,100 yuan that forced liquidation.

It seems that the Air Force first opened a sell order, suppressing the price. In fact, the value of the buy order at settlement was 100 yuan higher than the sell order. This means that overall, this creates buying power. The trader's counterparty, assuming it is the banker who controls the order, only costs a small amount of funds when retail investors sell the goods during this period. In the long washout, Gouzhuang's control rate of chips has been very high.

On the contrary, for long contracts, because the leverage ratio is high, it is easy to exit the market after making a profit. The value of the sell order at this time is higher than the value of the purchase at that time, so overall it will become a resistance when pulling orders and increase the cost of pulling orders.

When a large number of orders in the same direction are exploded, the long and short forces will be unbalanced, and the price will change more unscrupulously. Therefore, do not go against a strong copycat when it pulls the market. Some people always think that Gouzhuang always has to ship goods. However, Gouzhuang earns much more in the contract market than in the spot market, so there is no need to ship goods at all.

What's more, the spot trading volume is so low, who should the goods be shipped to? You can't get it out even if you think about it. Therefore, when the market cannot be controlled, it will be violently smashed. It does not matter whether the spot part makes money or not.