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Been meaning to write a case for why having multiple broking platforms makes sense. As of this writing, I do not have any crypto positions. This is not so much of reporting, but offering a consideration instead of being stuck and doing nothing. Unless you have been living under a rock, you must have known about the happenings to FTX. First and foremost, none of this to be construed as specific financial advice. But to be read as promoting general financial literacy purposes only.
I cannot assume that you have long positions in crypto because you might even be in profitable positions shorting the crypto market. But the problem might be that you cannot close out your position amidst the debacle unfolding and the price volatility is adding more uncertainty to your exposed position.
If you are long, for example, 1 BTC. Have another platform to short 1 BTC then.
If you are short, for example, 10 ETH. Have another platform to long 10 ETH.
Your exposed losses or profits are then insulated from further price volatility. This can buy you mental freedom for some time to rationalize your next steps. This neutral position is not to be held indefinitely of course. You got to unwind them at some stage. Therefore, make your own play.
Are there risks to do this? Of course.
There are costs involved in opening another position. Costs of financing perhaps to holding this newly opened position and we do not know exactly how long this position is to be held for. The examples used assume all tokens can be found across other platforms. This might not be the case for some tokens.
Exact matches may not be possible, and perhaps proxies can help. To get as near perfect hedging will definitely require calculations. A little more details on the formula to do this can be extracted from another write up of mine.
I am a broker in PhillipCapital and I do encourage people to have multiple brokers for reasons similar above. To hedge positions just in case one broker’s system goes bonkers for a while. Now you know why have multiple broking platforms.
If you would like to open a securities broking account with me, click here.