1. How to play bitcoin contracts
The contract can be completed directly on the bitcoin trading platform, and the leverage is the contract. However, the trading platform must be selected well, such as Huobi, Canadian currency station, etc. are more suitable, mainly because the main platform of the platform is the Bitcoin contract, in this way, many times the platform does activities about the contract users, and if you are in In the above, you can enjoy the corresponding benefits.
2. What is bitcoin contract and where to play
The leverage of virtual contract is the stable leverage at the level of fiat currency income: invest $100, you can get Profit = $100 * Bitcoin’s rise and fall * fixed leverage.
Assuming that the current price is 500USD/BTC, an investor buys 1 BTC at the current price, and the principal is 500USD. At this time, the investor can buy 50 BTC virtual contracts.
At this time, if the BTC price rises to $750, an increase of 50%, the investor’s contract income is 3.3333 BTC, and after selling at the current price, you can get $2,500, and the income is 5% of the principal invested. times.
Bitcoin futures offered by bitcoin exchanges are usually traded in bitcoin. Futures are relative to the spot, and the spot is a commodity that can be delivered with one hand and one hand, while futures are not actually “goods”, but an agreement (contract) that promises to deliver “goods” (subject) at a future time – futures contract . ZB Huobi, Binance
3. What is Bitcoin contract transaction
1. Definition of contract
A futures contract is a contract that the buyer agrees to trade in a specified period of time An agreement in which an asset is received at a specified price after a specified period of time, and a seller agrees to deliver an asset at a specified price after a specified period of time.
The price that both parties agree to use in future transactions is called the futures price. The specified date on which the two parties must transact in the future is called the settlement date or delivery date. The assets that both parties agree to exchange are called “underlyings”.
If an investor takes a position in the market by buying a futures contract (that is, agreeing to buy at a future date), it is called a long position or a long position in futures. Conversely, if an investor takes a position by selling a futures contract (that is, taking responsibility for the contract to be sold in the future), it is called a short position or short on futures.
2. Origin of the contract
A futures contract refers to a standardized contract formulated by a futures exchange that stipulates the delivery of a certain quantity and quality of commodities at a specific time and place in the future. It is the object of futures trading, and the participants of futures trading transfer price risk and obtain risk-return by buying and selling futures contracts on the futures exchange.
Futures contracts are developed on the basis of spot contracts and spot forward contracts, but the most essential difference between them is the standardization of the terms of futures contracts. For futures contracts traded in the futures market, the quantity, quality grade and delivery grade of the subject matter, as well as the premiums and discounts of substitutes, delivery locations, delivery months and other terms are standardized, making futures contracts universal.
In the futures contract, only the futures price is the only variable, which is generated by open auction on the exchange.
3. Classification of contracts
Digital currency contracts can be divided into: delivery contracts and perpetual contracts.
(1) Delivery contract: Futures delivery refers to the process in which both parties to the transaction settle the expired open contracts through the transfer of the ownership of the commodities contained in the futures contract when the futures contract expires.
(2) Perpetual contract: It is a derivative similar to leveraged spot trading, and is a digital currency contract product settled in BTC, USDT and other currencies. Investors can obtain the benefits of rising digital currency prices by buying long, or obtain benefits from falling digital currency prices by selling short.
Perpetual contracts are different from traditional futures: they have no expiry time, so there is no limit to the holding time. In order to ensure that the underlying price index is tracked, the perpetual contract ensures that its price closely follows the price of the underlying asset through the mechanism of funding fees.
4. The difference between the u standard and the currency standard
Difference: 1. The pricing unit is different. USDT-margined perpetual contracts are priced in USDT; currency-margined perpetual contracts are priced in USD. Therefore, the index price between the two will also be different. For example, the index price of BTC/USDT is based on the price of BTC spot to USDT on each exchange; while the index price of BTC/USD currency-margined perpetual contract is based on the price of each exchange. BTC spot price against USD.
2. The contract value is different. The value of each contract of a USDT-based perpetual contract is the corresponding underlying currency. For example, the face value of BTC/USDT is 0.001 BTC; the value of each contract of a currency-based perpetual contract is USD, for example, the face value of a BTC/USD contract is USD 100. .
3. The currencies used as collateral assets are different. All types of USDT-based perpetual contracts use the denominated currency USDT as the collateral asset, and users only need to hold USDT can participate in the transaction of various types of contracts; coin-based perpetual contracts use the underlying currency as the collateral asset, and users need to hold the corresponding underlying currency to participate in the transaction of this type of contract, such as BTC/USD currency-based perpetual contracts , the user needs to transfer BTC as a collateral asset.
Due to the difference in the currency used as the underlying asset, the risk of devaluation of the underlying asset for the two contracts is also different when the price falls. Assume that when the BTC/USD currency-margined perpetual price falls, the higher the required collateral assets for user positions, the more BTC required to hold the collateralized assets; but the USDT-based perpetual contract requires USDT because the required collateral assets are The fall in BTC price will not affect the value of USDT collateral assets.
Calculating profit and loss in different currencies. All types of USDT-margined perpetual contracts use the denomination currency USDT to calculate profit and loss; currency-margined perpetual contracts calculate profit and loss based on the underlying currency. For example, if a user trades BTC/USD currency-margined perpetual contracts, the currency of profit and loss is BTC.
Extension information:
1. What is the difference between U-based contracts and currency-based contracts?
1. Currency standard
Currency standard”, refers to the opening of positions and the final delivery, using the corresponding underlying products. For example, if you want to long or short BTC, you need to add BTC to the contract account. The final loss or gain is also settled in BTC.
2.U standard
“U standard” refers to the opening of positions and the final delivery, all using USDT as the circulation certificate, whether long or short BTC or ETH and other currencies need to be charged with USDT in the contract account, and the final loss or profit will be settled in USDT.
5. What are the rules for Bitcoin delivery contracts It should be noted that
The next-week contract and quarterly contract will participate in the settlement. After settlement, the profit and loss will be recalculated at the settlement base price, and the profit portion can be transferred out after settlement; if the user closes the position before settlement, then after settlement The margin required for opening a position and the realized profit and loss can all be transferred out of the virtual contract account.
6. The difference between the currency standard and the u standard
1.U standard “U standard” refers to the opening of positions and the final delivery, all of which use USDT as a circulation certificate. No matter whether you are long or short BTC or ETH or other currencies, you need to charge USDT in the contract account, and the final loss or profit, All are settled in USDT.
2. Currency standard”, which refers to the opening of positions and the final delivery, using the corresponding underlying products. For example, if you want to long or short BTC, you need to add BTC to the contract account. The final loss or gain is also settled in BTC.
In general, the advantages of the two are also very obvious.
Comparative example: When BTC was at 7400USDT, Camel used the currency standard to open a short position, BTC fell and earned 1BTC, but since the direction is the downward direction, if it encounters extreme market conditions, the earned BTC will shrink accordingly. When BTC was at 7400 USDT, Camel used the U standard to open short, BTC fell and earned 1 BTC, but since what was earned was USDT, even in extreme market conditions, there would be no asset shrinkage. In the currency circle, everyone wants to hoard more BTC. Coin-based contracts refer to opening positions and final delivery, using the corresponding underlying products.
There are many ways and strategies to store BTC. Earning BTC through currency-based contracts is also a good method: leveraging small capital and leveraging high returns—of course, under acceptable risks—currently Camel is using this method in Stock up on BTC and wait for the next surge. If you don’t want to store BTC for the time being, but want to use USDT to invest in other currencies, you might as well use the U standard for contract operations. For example, some friends like to ambush small currencies, and use the skyrocketing market of small currencies to increase their assets, and then exchange them for their long-term optimistic currencies. After entering 2020, whether it is a first-tier exchange, a second-tier, third-tier or even an 18th-tier exchange, they all focus on building their own contract products, and the contract market is unprecedentedly hot. Everyone should pay attention to the risks when investing. Don’t be overwhelmed after opening one or two orders. This is the lesson of Camel’s previous liquidation. Therefore, the magnification has been controlled under 30 times.
7. The difference between bitcoin spot and contract
Bitcoin spot means that no matter how much bitcoin falls or how much it rises, there is one Bitcoin is a Bitcoin. For contracts, it has economic leverage, and the system will automatically liquidate and close positions, which is very risky.
8. What is a Bitcoin contract
Basics of a Bitcoin contract
A Bitcoin contract is a contract that does not need to actually own Bitcoin A tradable contract. It is very different from currency-to-currency transactions, which must be physically held in digital currency.
Bitcoin contracts allow you to predict Bitcoin price movements and hedge risk. This way of trading means you are investing in price trends, not the asset itself.
When trading Bitcoin contracts, you can decide to go short or long. Choosing to go long indicates that you expect the price of Bitcoin to rise. On the other hand, choosing to go short indicates that you expect the price to fall.
Leveraged trading
You can choose to trade with high leverage, which is a feature of Bitcoin contracts. Using leverage means that you do not have to invest 100% of the transaction amount when trading contracts. Instead, you only need to deposit an initial margin, which is only a fraction of the total contract value.
Leveraged trading allows you to have a large exposure with a small amount of money while managing risk.
Perpetual Contracts
Although there are many different types of contracts, this article focuses on perpetual contracts. As the name suggests, these contracts have no expiration date. Traders who use perpetual contracts to go long or short can hold their positions indefinitely, unless the contract is liquidated, which means they will not lose more than their initial margin.
In perpetual contracts, Bitcoin is priced based on a specific index price. Index prices are based on the average price of Bitcoin across multiple cryptocurrency exchanges.
Bitcoin contracts have become a very popular trading tool. Contract trading opens the door for many traditional investors who are not ready to allocate funds to digital assets but still want to benefit from attractive price volatility.
To open Bitcoin contract trading, you need to find an exchange that offers contract trading. The AAX platform, in a compliant and secure environment, provides you with bitcoin contract trading services.
9. What is a bitcoin futures contract
Bitcoin futures contracts are usually standardized contracts based on the bitcoin price index.
Bitcoin futures offered by bitcoin exchanges are usually traded in bitcoin. Futures are relative to the spot, and the spot is a commodity that can be delivered with one hand and one hand, while futures are not actually “goods”, but an agreement (contract) that promises to deliver “goods” (subject) at a future time – futures contract .
Subject: Also known as the underlying asset, which explains what to buy or sell. At present, the underlying bitcoin futures are the bitcoin price index, and the methods of generating settlement and delivery prices are based on this index.
Fees: Unlike stock transactions, which are subject to stamp duties, commissions, transfer fees, and other fees, futures transactions are only charged a handling fee. There are two types of transaction fees for Bitcoin futures: opening and closing positions, which are charged when opening a position (such as OKCoin) and when closing a position (such as 796). Bitcoin futures fees are generally 0.03% of the total contract value.
Margin: Margin is closely related to another concept – leverage, which generally reflects the level of income and risk by leverage ratio. For example, the new 50 times leverage (ie 2% margin) introduced by 796 means that investors can buy 50 bitcoin futures contracts (ie 50 times leverage) by investing 1 bitcoin;
or From another perspective, 1 bitcoin invested by an investor is equivalent to 2% of the 50 bitcoins purchased (ie, 2% margin ratio).
Through 50 times leverage, the return of futures relative to spot is magnified by 50 times, such as buying 1 coin spot and buying 50 more coin futures with 1 coin at the same time, assuming spot and futures prices If both rise by 100%, then the spot earns 1 coin, and the futures earns 50 coins.
(9) Bitcoin and u-based contract extended reading
A futures contract is an agreement in which a buyer agrees to receive an asset at a specified price after a specified period of time, and a seller agrees to deliver an asset at a specified price after a specified period of time. The price that both parties agree to use in future transactions is called the futures price.
The specified date on which future transactions must be entered into between the parties is called the settlement date or delivery date. The assets that both parties agree to exchange are called “underlyings”. If an investor takes a position in the market by buying a futures contract (that is, agreeing to buy at a future date), it is said to be a long position or a long position in futures.
On the contrary, if the investor’s position is to sell a futures contract (that is, to assume responsibility for the contract to be sold in the future), it is called a short position or a short position on futures.
10. What is Bitcoin contract trading
Similar to futures contracts, it is a trading method proposed by BitStar.
The leverage of the Bitcoin virtual contract is the stable leverage of the fiat currency income level: investing $100, the income you can get = $100 * Bitcoin’s rise and fall * fixed leverage multiple.
Assuming that the current price is 500USD/BTC, an investor buys 1 BTC at the current price, and the principal is 500USD. At this time, the investor can buy 50 BTC virtual contracts.
At this time, if the BTC price rises to $750, an increase of 50%, the investor’s contract income is 3.3333 BTC, and 2500 can be obtained after selling at the current price.�� Yuan, the income is 5 times of its principal investment.
Bitcoin futures offered by bitcoin exchanges are usually traded in bitcoin. Futures are relative to the spot, and the spot is a commodity that can be delivered with one hand and one hand, while futures are not actually “goods”, but an agreement (contract) that promises to deliver “goods” (subject) at a future time – futures contract .
(10) Bitcoin and u-standard contract extended reading:
Futures contract is a contract that the buyer agrees to An agreement in which an asset is received at a specified price after a specified period of time, and a seller agrees to deliver an asset at a specified price after a specified period of time. The price that both parties agree to use in future transactions is called the futures price.
The specified date on which future transactions must be entered into between the parties is called the settlement date or delivery date. The assets that both parties agree to exchange are called “underlyings”. If an investor takes a position in the market by buying a futures contract (that is, agreeing to buy at a future date), it is said to be a long position or a long position in futures.
On the contrary, if the investor’s position is to sell a futures contract (that is, to assume responsibility for the contract to be sold in the future), it is called a short position or a short position on futures.
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