Ⅰ What does Bitcoin contract trading mean
Contract trading is a general term for Bitcoin Litecoin futures contract trading.
In June 2013, 796 Exchange was the first in the bitcoin industry to develop bitcoin weekly delivery standard futures—T+0 two-way trading virtual commodities as collateral barter contracts (contract transactions).
The emergence of contract trading ended the previous history that Bitcoin could not be shorted, and opened the prelude to the development and prosperity of the Bitcoin derivatives market.
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Ⅱ What is Bit A Bitcoin contract
Basic of a Bitcoin contract
A Bitcoin contract is a contract that can be traded without actually owning Bitcoin. 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.
Ⅲ Is the Bitcoin Index the contract with the spot or the spot with the contract
Obviously it is the contract that drives the spot market price change, but the contract risk is huge .
What are Bitcoin Options?
The so-called bitcoin option is to predict the future rise and fall of bitcoin. The profit calculation is the same as that of the spot. When buying up, you will earn as much as you go up in the cycle, and if you buy down, you will earn as much as you go down in the cycle. In short, it is to use a very small principal to bet on the ups and downs of the future range, so as to obtain high returns.
How do bitcoin options work?
For example, the current price of Bitcoin is $10,000, and you think it will rise in the next hour. Therefore, you open a 1-hour call option at a cost of 20 USDT. As expected, Bitcoin has risen by $1,000 within 1 hour, and the system will automatically settle when it expires in 1 hour. You will get a return of $1,000, which is equivalent to 50 times the return of the principal.
If Bitcoin falls in the next hour, you will lose the principal of the 20 USDT options you invested. This is the benefit of options with “unlimited returns and limited risks”.
Ⅳ The difference between bitcoin spot and contract
Bitcoin spot means that no matter how much bitcoin falls or how much it rises, there is a bitcoin in hand, which is one bitcoin. For contracts, it has economic leverage, and the system will automatically liquidate and close positions, which is very risky.
Ⅳ Want to play bitcoin contracts, how to use contract big data
Confirm current market trends, overall sentiment, etc. by paying attention to changes in various data and comparing historical data .
Ⅵ When buying futures, there must be a counterparty. Wouldn’t the price stay the same?
Futures must have counterparties, and if something is sold, someone must buy it, and vice versa. Prices are bound to change.
Some terms in futures:
1, open interest: refers to the opening of buyers and sellersThe sum of the number of contracts that have not yet performed a reverse closing operation. The size of the open interest reflects the size of the market transaction size, and also reflects the size of the differences between the long and short sides on the current price. For example: if two people are used as counterparties, one person opens a position to buy 1 contract, and the other person opens a position to sell 1 contract, then the open interest is displayed as 2 lots.
2. Inner disk and outer disk: It is equivalent to the inner and outer disks in the stock software. For example, if the order is sold by the seller, it is included in the “outer order”, and if the order is made by the buyer, it is included in the “inside order”. The “outer disk” and “inner disk” are added together for the volume.
3. Total Lot: Refers to the total number of lots traded for this contract as of now. In China, the transaction of 1 lot by both parties is calculated as 2 lots, so you can see that the mantissas are all double digits.
4. Commission ratio: refers to an index used to measure the relative strength of trading orders within a period of time, and its calculation formula is: commission ratio = 〖(the number of commissioned buying lots – the number of commissioned selling lots) ÷ (the number of commissioned buying lots + commissioned selling lots) Lot size)〗×100%
5. Position difference: it is the abbreviation of position difference, which refers to the difference between the current position and the position corresponding to yesterday’s closing price. If it is positive, the open interest is increasing today, if it is negative, the open interest is decreasing. The position difference is the increase or decrease of the position. For example, the position of the November stock index futures contract today is 60,000 lots, while yesterday it was 50,000 lots, so the difference between today’s positions is 10,000 lots. Another: there is also a change in the position difference in the transaction column. Here, it refers to the comparison of the position change caused by the current transaction order and the immediate position of the previous transaction, whether to increase or reduce the position.
6. Long opening: short for opening long position, which means that the open interest increases, but the increase in the open interest is less than the current amount, and it is an active buying order.
7. Short opening: short for short opening, which means that the open interest increases, but the increase in the open interest is smaller than the current amount, and it is an active selling order; for example: reverse the selling and buying in the above example. Just come.
8. Double open: In a transaction, the open position is equal to the current amount, the closing amount is zero, the open position is increased, and the difference is equal to the current amount, indicating that both long and short positions have increased their positions.
9. Double closing: It means that in a certain transaction, the opening amount is equal to zero, the closing amount is the current amount, the open position is reduced, and the difference is equal to the current amount, indicating that both long and short positions are reduced.
10. Long exchange and short exchange: short for long exchange and short exchange. If in a certain transaction, the opening and closing volume is equal to half of the current volume, and the open interest remains unchanged, then Indicates that neither the long position nor the short position has changed, but some positions have been transferred between long positions or short positions. Combined with the status of the internal and external disks, we define the status of the transaction in the external disk as a multi-hand exchange, and in the internal disk as a short exchange hand.
11. Long closing and short closing: short for long closing and short closing. Long closing refers to a decrease in the amount of open interest, but the absolute value of the increase in open interest is less than the current amount, and it is an active selling order; Position refers to the decrease in open interest, but the absolute value of the increase in open interest is less than the current amount, and it is an active buying order. For example: Suppose three people are used as counterparties, among which A has a long position of 5 lots, B has a short position of 5 lots, and C has no position; if A wants to close the position and close part of the position, he will sell and close the position 3 lots, C thinks that If the market will fall, then it will be listed and sold to open 2 lots. At this time, B also wants to close the position, so it will be placed at the current price (sell price) to buy and close 5 lots. Closed position), the current hand volume is 10 lots, and the position difference is -6. If it is a long position closing, B is used as an active closing order, and A can then close the position.
VII What are the rules for Bitcoin delivery contracts that need to be paid attention to
Sub-week contracts and quarterly contracts will be involved in settlement. After settlement, profit and loss will be recalculated at the settlement benchmark price. After settlement, the profit portion can be transferred out; if the user closes the position before settlement, all the margin and realized profit and loss required to open the position after settlement can be transferred out of the virtual contract account.
Ⅷ The way to not lose money in bitcoin contracts
Any investment risk and return coexist. If you don’t want risk, naturally there is no return.
IX What is the difference between Bitcoin Options and Bitcoin Contracts
There is no particular difference. Bitcoin options means that the Bitcoin has not yet come out, and you are buying futures. There is a fundamental difference between the two of them.
X What is the meaning of counterparty price in bitcoin contract trading
The trading principle of SCCTI CFD is similar to virtual currency trading, the difference is that when you trade virtual currency When the CFDs, such as bitcoin, you do not actually hold bitcoin, but trade the price trend of bitcoin, by defining a CFD on bitcoin price with the CFD broker, namely SCCTI,
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