/1 on the advantages of replacing high leverage margin swap/futures positions with options

/2 have heard anecdotes of participants losing large parts of their crypto holdings by chasing the bull market with mistimed leveraged longs and see thousands of nameless participants in the billions in notional that are liquidated on any material move in the markets.

/3 there are two enormous costs to engaging in this behavior:

1) poor traders tend to chase, margin longing after significant price moves up have already happened. combined with high leverage, this means they manage to lose money by being liquidated (force sold) on pullbacks.

This results in somehow losing money longing in a bull market.

2) Derivatives exchanges charge a maintenance margin when you are liquidated to give them a buffer to close losing positions prior to the bankruptcy price.

Any excess goes to the insurance fund. This excess necessitates that margined positions do not capture their full EV.