One week had passed since Leila’s warning in the library. One week of sleepless nights, skipped meals, and a growing obsession that had consumed every waking moment of Zayn’s life. His bedroom had become a shrine to the markets—charts plastered across his walls, sticky notes covered in calculations, energy drink cans forming fortresses around his desk.
And in that week, something remarkable had happened. Zayn had won. Again and again.
His trading history told a story of almost unbelievable success. Four more trades, all with 50x leverage, all generating profits that seemed too good to be true. His initial $500 had ballooned to $1,200. The numbers danced across his screen like a promise of the future he’d always dreamed of.
Trade 1: $100 → $180 (80% profit)
Trade 2: $150 → $270 (80% profit)
Trade 3: $200 → $340 (70% profit)
Trade 4: $250 → $410 (64% profit)
“$1,200,” Zayn whispered, staring at his account balance with something approaching reverence. “In one week. That’s more than I make in a month at the grocery store.”
He was sitting in his usual position—hunched over his desk, eyes bloodshot, three empty energy drink cans within arm’s reach. The clock on his wall read 2:47 AM. He’d been trading since school ended, barely pausing to eat dinner, ignoring his mother’s increasingly worried calls.
“Zayn, are you coming down for dinner?”
“Not hungry, Mom.”
“Zayn, you need to sleep.”
“Later, Mom.”
“Zayn, I’m worried about you.”
“I’m fine, Mom. Just a few more minutes.”
He’d said “just a few more minutes” three hours ago. He’d said it so many times that the words had lost all meaning.
The truth was, Zayn wasn’t fine. He knew it, somewhere in the back of his mind, beneath the layers of adrenaline and greed and desperate hope. His body was a wreck. His eyes burned from staring at screens for hours on end. His hands trembled with a constant low-grade anxiety that never quite went away. He’d lost five pounds in the last week, his clothes hanging looser on his frame.
But he couldn’t stop. Not now. Not when he was finally winning.
“Leila was wrong,” he told himself, scrolling through his trading history with a satisfied smile. “She said the funding rate would eat my profits. She said I was being reckless. But look at me now. Look at all this money.”
He pulled up his transaction history and scanned the entries. There they were—the funding payments, deducted every eight hours like clockwork. $2.50 here. $2.50 there. Another $2.50. Over and over again.
A week of funding payments: $124.00.
“That’s… a lot,” he admitted, the number catching him off guard. He’d known he was paying fees, of course. He’d seen the deductions. But he hadn’t really processed the cumulative effect. $124 in seven days. That was 10% of his total profits.
“Still worth it,” he said firmly, pushing the concern aside. “I made $700 in profits after fees. That’s incredible. That’s more than I ever could have made with spot trading.”
He scrolled further back, looking at the funding rates for each trade. The pattern was clear—the rate had been climbing steadily as more traders piled into long positions.
Week 1, Day 1: 0.05%
Week 1, Day 2: 0.06%
Week 1, Day 3: 0.07%
Week 1, Day 4: 0.08%
Week 1, Day 5: 0.09%
“0.09%,” Zayn muttered, frowning. “That’s almost double what it was when I started.”
He did the math in his head. 0.09% of a $5,000 position was $4.50. Three payments a day was $13.50. $94.50 a week. $405 a month.
“That’s getting expensive,” he admitted, a flicker of doubt crossing his face. “Maybe I should switch to lower leverage. Leila said—”
He caught himself. Why was he thinking about Leila? She didn’t know anything. She was just a risk-averse girl who’d never made a real trade in her life. What right did she have to tell him what to do?
“No,” he said firmly. “I’m not going to back off now. I’m winning. The strategy works. I just need to—”
He paused, looking at his trading history again. The profits were there, undeniable. But so were the funding costs. And somehow, the numbers didn’t feel as good as they had a few minutes ago.
“Wait,” he said suddenly, leaning forward. “What if I just… compensated?”
The idea came to him in a flash of inspiration, a stroke of genius that felt like a revelation. If the funding rate was eating into his profits, he could simply increase his leverage. Higher leverage meant bigger profits per percentage move. Bigger profits meant the funding fees became proportionally smaller.
“With 100x leverage,” he calculated, his fingers flying across the keyboard, “a 1% move gives me 100% return. That covers a whole week of funding fees in a single trade.”
He pulled up the leverage selector on The Nexus exchange. The slider showed options from 1x to 100x. He was currently at 50x, the level that had served him so well over the past week.
But 100x was there, just waiting for him. Tempting him. Calling to him like a siren’s song.
“100x,” he repeated, the word tasting like victory. “With 100x, I can make twice as much profit for the same price movement. I could turn $100 into $1,000 in a single day. I could be a millionaire in a month.”
He was already opening a new position, his hands moving with practiced speed. He deposited another $200 from his savings account—money he’d been saving for a new laptop, money he couldn’t afford to lose, money he was about to throw into the market with reckless abandon.
His collateral: $300.
His leverage: 100x.
His position size: $30,000.
“Thirty thousand dollars,” he breathed, staring at the number. “That’s more than my parents make in a year.”
He selected a long position on CTK, which was currently trading at $50.00. The chart showed a slight pullback from its recent highs, but the trend was still up. Everything indicated a bounce.
“This is perfect,” he said, his heart pounding with excitement. “I’ll buy the dip. CTK always bounces off $50. I’m going to make a killing.”
He hit the “Confirm Long” button with a decisive click.
The first hour was magical. CTK surged from $50.00 to $50.30, a 0.6% move that translated into a 60% return on his collateral. His $300 was now $480.
“Sixty percent profit in an hour,” Zayn crowed, pumping his fist in the air. “This is insane! This is incredible! This is—”
He paused, checking his funding rate. It had ticked up again.
CTK Funding Rate: 0.10%
“That’s… higher,” he said, his excitement dimming slightly. “0.10% of $30,000 is $30. Every eight hours. That’s $90 a day. $630 a week.”
He looked at his profit: $180. Not bad for an hour’s work. But $30 of that would be gone in a few hours. And another $30 in eight more. And another $30 after that.
“I need CTK to keep going up,” he said, his earlier confidence now tinged with anxiety. “If it stalls, the funding will eat my profits. If it drops—”
He shook his head. He wasn’t going to think about it dropping. The trend was strong. The market was bullish. Everything was fine.
At 8:00 AM, the first funding payment hit: $30 deducted from his position.
“Okay, that’s fine,” he said, though his stomach clenched. “That’s just the cost of doing business. I’m still up $150.”
At 9:00 AM, CTK reached $50.45. His profit was $270.
“See? The funding doesn’t matter. I’m making more than I’m paying.”
At 10:00 AM, CTK pulled back to $50.30. His profit dropped to $180.
“It’s just a pullback,” he told himself. “It’ll bounce back.”
But it didn’t bounce back. By 11:00 AM, CTK was at $50.20. His profit was $120.
“I should close,” he said, his hand hovering over the button. “I should just close and take the profits.”
But he couldn’t do it. Closing would mean admitting that the funding rate was a problem. Closing would mean accepting that Leila had been right. Closing would mean giving up on the dream of exponential growth.
“No,” he said, his voice trembling with the effort of self-control. “I’m not closing. I’m going to let it run. It’ll bounce. It always bounces.”
The afternoon was a slow-motion nightmare. CTK drifted sideways, trading in a narrow range between $50.15 and $50.25. Each hour, Zayn watched his unrealized profit shrink and grow, shrink and grow, like a yo-yo attached to his wallet.
At 4:00 PM, the second funding payment hit: another $30.
“$60 in funding fees today,” he muttered, his hands clenched into fists at his sides. “That’s 20% of my collateral.”
His profit: $90. After fees, his net profit was just $30.
“That’s not enough,” he said, shaking his head. “That’s not nearly enough. I need more. I need CTK to move.”
He opened his phone and scrolled through the news feeds, looking for anything that might drive the price higher. A positive tweet. A bullish analyst report. A partnership announcement. Anything.
But there was nothing. Just the usual market noise, the endless chatter of traders who didn’t know any more than he did.
“Why isn’t it moving?” he demanded, his frustration boiling over. “What’s wrong with this market?”
He was spiraling. The anxiety that had been building for days was finally breaking through his carefully constructed walls. His hands were shaking again, worse than before. His heart was racing. He could feel the panic rising in his chest like a wave, threatening to overwhelm him.
“Think, Zayn. Think. You know what to do. You’ve been through this before. Just calm down and—”
He couldn’t calm down. The numbers were too big. The risk was too high. The funding rate was bleeding him dry, and there was nothing he could do about it.
At 8:00 PM, the third funding payment hit: another $30.
“$90 in funding today,” Zayn said, his voice hollow. “That’s… that’s my entire position. $90 gone in a single day.”
His collateral was now $210. His unrealized profit was $60.
“$60,” he repeated, his lips twisting into a bitter smile. “That’s all I have left. $60. And it’ll be gone tomorrow if this keeps up.”
He stared at the screen, his mind racing with possibilities. He could close the position and walk away with a small profit. He could reduce his leverage and lower his funding costs. He could add more collateral to give himself breathing room.
Or he could just… wait. Wait for CTK to break out. Wait for the big move that would make all his problems disappear.
“One more day,” he decided, his voice thin and desperate. “I’ll give it one more day. If it doesn’t move by tomorrow, I’ll close.”
He knew it was a bad idea. He knew he was making excuses. But he couldn’t stop himself. The addiction was too strong. The need to win was too powerful.
The next morning, Zayn woke up feeling like death. His eyes were crusty and swollen. His head throbbed with a dull, persistent pain. His stomach churned with anxiety and hunger.
He reached for his phone with trembling hands and opened the trading app.
CTK: $49.85
“What?” he gasped, sitting bolt upright. “No. No, no, no.”
CTK had broken below $50.00 overnight. His position was down.
His collateral: $105.
His unrealized loss: -$195.
His liquidation price: $49.50.
“I’m $0.35 away from liquidation,” he whispered, his voice cracking with panic. “Thirty-five cents. That’s all it takes.”
He stared at the screen, frozen by fear. He should close the position. He knew he should close the position. But closing would mean losing everything. It would mean admitting defeat. It would mean giving up on the dream.
“There’s still a chance,” he told himself, the words tasting like ash in his mouth. “It could bounce. It could come back. It always comes back.”
But even as he said it, he knew the truth. He was lying to himself. He’d been lying to himself for days, weeks, months. The dream was over. The money was gone. All that was left was the inevitable crash.
He sat on his bed, clutching his phone, watching the numbers tick down with the slow, inexorable certainty of a countdown.
CTK: $49.75… $49.65… $49.55…
His collateral: $75… $45… $15…
The margin call warning flashed across his screen: “URGENT: Your position is under-collateralized. Please add funds or reduce your position immediately.”
“I don’t have any more money,” he said, his voice breaking. “I don’t have anything left.”
CTK: $49.50.
The liquidation notification appeared.
“Liquidation Event – Position Closed – Loss: $300.00”
Zayn stared at the screen, his face blank with shock. The numbers blurred and swam in front of his eyes, refusing to make sense.
He’d lost everything. Every dollar he’d ever saved. Every dollar he’d ever earned. All gone in a single instant.
The energy drink cans on his desk seemed to mock him. The trading manuals on his bed seemed to sneer. The charts on his wall seemed to laugh.
He’d been so confident. So arrogant. So sure of himself.
And now he had nothing.
His phone buzzed with a notification. A message from Leila.
“Zayn, I just saw the CTK price drop. Are you okay? Did you close your position?”
He stared at the message, his fingers frozen above the keyboard.
“What do I even say?” he whispered, his voice hollow with shame.
He typed a response, deleted it, typed another, deleted that too. Finally, he sent a single word:
“No.”
The response came almost immediately:
“Please talk to me. I’m here if you need someone.”
Zayn turned off his phone and lay back on his bed, staring at the ceiling.
He’d lost everything. But somehow, that wasn’t the worst part.
The worst part was that Leila had been right. She’d warned him about the funding rate. She’d warned him about the risks. She’d warned him about the danger of high leverage.
And he’d ignored her. Because he was too arrogant to listen.
“Stupid,” he whispered to himself. “Stupid, stupid, stupid.”
Table of contents:
Introduction
Chapter 1: The Leverage Trade
Chapter 2: Perpetual Contracts
Chapter 3: The Funding Rate
Chapter 4: The Long Squeeze <<<<<< NEXT
Chapter 5: The Margin Call
Chapter 6: The Liquidation Cascade
Chapter 7: The Socialized Loss
Chapter 8: The Insurance Fund
Chapter 9: The Position Limit
Chapter 10: Leverage Is a Tool, Not a Toy
