What does it mean to go negative on exchange?

I know this is a very basic question, but I am just curious about all this exchange stuff and I'm new to this.. so here goes

If I trade at a bitcoin marketplace (exchange) lets say Kraken, Bitstamp or wherever.. and I for example buy 100$ worth of Bitcoin.

The next day Bitcoin falls and I go negative eg. -7,8

What does this mean? a) did I just loose 100$ and have to pay this extra 7,8 to get back to 0,0? b) or did I just loose 100$ because the price fell but am still the owner of that 0,0001 BTC and I wait a couple of days so the value goes up again and I go positive, or sell everything and accept the fact that i blew 100$?

Which one is it?

exchanges

Sebastian

Posted 2017-12-30T15:12:29.270

Reputation: 11

To put it simply, if you initially got $100 worth of Bitcoin on Monday, and then comes Tuesday and Bitcoin dips -7,8%. Your market value will be $100 * 0.922 = $92,2. So you got $92,2 worth of Bitcoin now. – Chak – 2017-12-30T21:18:55.817

Answers

When you buy 0.0001 BTC, it's the same as buying anything that you could, but are not required to, sell in the future. You (on the books of the exchange, until/unless you transfer the BTC out to a wallet you control) are the owner of 0.0001 BTC. If the price declines [or rises], you have a so-called "paper" or "unrealized" loss [or profit], but that's just hypothetical until/unless you actually sell the BTC.

If the price declines [or rises], you are "poorer" [or richer] -- your net worth declines [or increases], using the current BTC market price as the value of what you own. But until you sell it, you just own 0.0001 BTC and there is no need to pay (or receive) any $US regardless of price changes in the BTC market.

brec

Posted 2017-12-30T15:12:29.270

Reputation: 301