I am paid in USDC and have 1.5 years salary on hand because I'm dumb and procrastinated putting it into sensible investments after the last thing it was in dried up. Today, seeing the USDC depeg and realizing that if it evaporates my future payroll also disappears and I'm turbofucked, I opened a $100k long at 7x leverage. If/when I sell the rest of my USDC for something else*, I'll take a 3%+ haircut, which will be offset by the $20k profit if USDC returns to $1 and I sold for no reason. But if USDC falls below $0.85 I lose $100k. I think it's likelier than not that USDC returns to peg on Monday. But it's possible that the irrational market goes really low, wiping me out, and then comes back Monday. So here goes. Gonna be shitting myself all weekend.
Liquidation: $0.8555
Break-even: $0.9694
Profit at $1: $19,609
Truly atrocious timing on the open, I woke up when it was at 94c but as soon as I had finished testing this out with a small position Circle made an announcement that temporarily pushed the price up to 97c and generated so much volume that KuCoin shut down USDC inflows. Every time there's an unusual market event somebody seems to hit the "no buys" button. I should have spaced it out over a couple hours though.
*problem being of course there's really no safe asset to flee into - all the stablecoins are garbage and the offramps I have access to are slow because I mostly used Coinbase
edit: i set up a thing to call my phone if it hits my $0.87 stop loss so I can sleep. i'll post update Monday or whenever i'm out of the trenches. fuck wallstreetbets i need you idiots to keep fighting with me so I don't think about the nauseating amount of capital technically under my control
this doesn't make sense to me - USDC went to 96 again overnight. I set the stop loss at a value where I think it's not going to get triggered by random market fluctuations before Monday's news.
Please note that I'm starting out with USDC holdings (and so risking a possible total loss anyway; I think if there is a crash to 0 it'll be fast and I probably won't have time to get my money out). This is one of those bad investor psychology loss-aversion trades.
Looks like you're in the green on this, so congrats. I'd still take this as a time to reflect on your reasoning since I'm not sure how much thought you put into this trade that you didn't disclose in your post.
appreciate it. I thought it was most likely that USDC would return to 1 today but wanted downside protection in the way of early sale without net loss in most likely scenario. Ran it by my finance friends. Last night's Yellen announcement was silly but whatever, not gonna look a gift horse in the mouth.
In terms of risk reward, since your upside is only 3 points you should only have 1 point of downside. The reasoning for where your stop loss is makes sense but your entry doesn't from a risk reward perspective, meaning you shouldn't make the trade unless you got in at around 89 (3 down, 11 up). I don't know enough about the exchange itself or how withdrawals work, if you're assuming Monday morning they're going to get slammed in a bank run and it'll go to 0 immediately which my intuition wouldn't assume (if tether is still standing despite its obvious indiscretions). If I were in your shoes I would've gotten out at a 3% haircut and just take the tax write off rather than risk it all-or-nothing since this seems like a large enough sum that you're letting yourself get emotionally involved.