Scraycrovic Please stop spamming our forum soliciting users to buy your tokens. One post is enough, but multiple posts is spam.
mikesmith Great question, what you're talking about is essentially foreign exchange risk. It depends how you frame your returns, and what is your point of reference.
Before I give an example, please check out this post: Fractional Trading, because I see that you're talking about your trades in terms of shares, which isn't really in line with how things work on Morpher.
Let's say you buy $100 worth of MPH tokens @ $0.04, that's 2,500 MPH.
You invest them in a portfolio of assets, and after a month your portfolio has increased by 20%, or 500 MPH, and you now have a total of 3,000 MPH.
Scenario 1(A): If Morpher's own token price decreases to $0.02, that 3,000 MPH is now only worth $60.
Scenario 2(B): If Morpher's own token price increases to $0.06. that 3,000 MPH is now worth $180.
Imagine you invested 2,500 MPH, but your portfolio decreased by 20%, and now you only have 2000 MPH.
In Scenario 1(C), @ $0.02, that MPH is worth $40.
In Scenario 2(D), @ $0.06. that MPH is worth $120.
Exchange rate risk is something you have to worry about a lot in trading, especially if you trade foreign assets.
In Scenario 1A your portfolio increased, but your underlying settlement currency devalued. Your return was 20%, but it was -40%.
In Scenario 2B your portfolio increased in value and so did the underlying settlement currency, which means your gains were boosted, and while you earned a 20% return in MPH terms, in USD terms you earned 80% returns.
In Scenario 1C your portfolio decreased by 20% and the underlying currency also decreased, so you sustain a double loss totalling to -60%.
In Scenario 2D your portfolio decreased by 20%, but the underlying currency increased, so despite your losses in MPH you actually earned a 20%.
Hope this helps !
