A. What is a bitcoin contract transaction
1. Definition of a contract
A futures contract is a buyer agreeing to receive an asset at a specific price after a specified period of time. An agreement in which 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 product 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 differ from traditional futures in a certain way: they have no expiration time, so there is no limit to how long a position can be held. 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.
B. Bitcoin contract game rules
Trading hours
Contract trading is 7*24 hours, only on Fridays at 16:00 (UTC) +8) Trading will be interrupted during settlement or delivery. In the last 10 minutes before delivery, the contract can only be closed, but not opened.
Trade Types
Trade types are divided into two categories, opening and closing positions. Open and close positions are divided into two directions: buy and sell:
Buy and open long (bullish) means that when the user is bullish or bullish on the index, he newly buys a certain amount of a certain contract. Carry out the “buy to open long” operation, and the long position will be increased after the match is successful.
Selling to close long position (long position closing) refers to the sell contract that the user makes up for the future index market when he is no longer bullish, hedging with the currently held buy contract to offset the exit from the market. Carry out the “sell to close long” operation, and the long position will be reduced after the match is successful.
Sell and open short (bearish) refers to a new sale of a certain amount of a certain contract when the user is bearish or bearish on the index. Carry out the “sell to open short” operation, and the short position will be increased after the match is successful.
Buy to close the short position (short order to close the position) refers to the buy contract that the user no longer bears on the future index market and make up the contract, which is offset with the current sell contract to offset the exit from the market. Carry out the “buy to close short” operation, and the short position will be reduced after the match is successful.
Order method
Limit order: The user needs to specify the price and quantity of the order. Limit orders can be used to open and close positions.
Order at the counterparty price: If the user chooses the counterparty price to place an order, the user can only enter the order quantity, and cannot enter the order price.
The system will read the current latest counterparty price at the moment of receiving the order (if the user buys, the counterparty price is the sell 1 price; if it is sell, the counterparty price is the bid 1 price), and then place the order. A limit order for this counterparty price.
Positions
After a user opens a trade, he/she has a position, and the positions of the same contract in the same direction will be merged. In a contract account, there can only be a maximum of 6 positions, that is, a long position in the current week contract, a short position in the current week contract, a long position in the next week contract, a short position in the next week contract, a long position in the quarterly contract, and a short position in the quarterly contract.
Order Restriction
The platform will limit the number of positions held by a single user in a certain period of contracts and the number of orders placed for a single position opening/closing to prevent users from manipulating the market.
Bitcoin contract gameplayWhat is it? Through the above introduction, I believe that everyone has some understanding of how to play Bitcoin contracts. Bitcoin contracts are not complicated in simple terms. There are two main functions of Bitcoin contracts. One is to hedge future risks, which is often heard hedging value. The other is that the Bitcoin contract has leverage, so it can amplify the gains with a small amount of money. Of course, if the investor makes a mistake in judgment, it will also amplify the loss.
1. What is contract transaction?
Contract trading is actually very simple, it is a two-way transaction, you can buy up (long) or buy down (short), and you can sell as you buy, buy in the last minute, and close the position when the order is profitable the next minute, as long as It can be profitable in the right direction, and the contract trading mechanism is more flexible, which is also the current trend in digital currency investment.
2. What is a perpetual contract and what is the difference between it and an ordinary delivery contract?
Perpetual contract is an innovative financial derivative, which is similar to traditional futures contract, the biggest difference is: perpetual contract has no expiration date or settlement date, and users can hold positions indefinitely.
In addition, the perpetual contract introduces the concept of spot price index, and through the corresponding mechanism, the price of the perpetual contract returns to the spot index price. Therefore, unlike traditional futures, the price of the perpetual contract will not change most of the time. Too much deviation from the spot price.
Imagine a futures contract for a physical commodity, such as gold. In traditional futures markets, these contracts mark the delivery date for gold. That is, gold should be delivered when the futures contract expires. Since in the traditional futures market, one party is required to actually hold gold, this will lead to the “holding cost” of the futures contract.
The essence of a perpetual contract is the same as that of a delivery contract. The difference is that the delivery contract has a delivery date. On the delivery date, no matter whether your order is profitable or in a loss, you will be forced to sell it. Yes, you can sell whenever you want, there is no delivery date.
3. What are the advantages of operating perpetual contracts?
Perpetual contracts are not limited by time and have no delivery date. Traders can hold for a long time to obtain greater investment returns. At the same time, perpetual contracts provide up to 100 times leverage, and traders can flexibly adjust after opening positions according to their trading needs. The platform provides flexible risk protection while ensuring the best trading experience for traders.
The automatic liquidation mechanism ensures the interests of traders and is used to determine who is responsible for forced liquidation, effectively ensuring that the interests of traders are not affected by huge losses caused by high-risk speculators. In addition, a double price mechanism is adopted, and the mark price is used as the trigger price for liquidation, and the mark price refers to the spot price of the global mainstream trading platform in real time.
Perpetual contracts can only use 1% of the market value of the coin to participate in the transaction, which is impossible for hoarding coins, and it takes up very little funds. That is to say, at a price of around $10,000 in BTC, one BTC can be traded for around $100 on a perpetual contract. The most important thing in operating a contract is the direction and position of buying and selling. The most important thing is to operate on the perpetual contract platform of a regular exchange, and you can enjoy one-to-one guidance every day to help you grasp the biggest market situation and avoid the risk of reverse operation.
C. What is a Bitcoin contract
The contract mentioned in it is a non-standard transaction, which can be rewritten by Bitoind, BitCoin wallet code or by using bitcoinj Generate non-standard transactions, although normal wallets will not accept these non-standard transactions, but some mining pools such as Eligius.st accept non-standard transactions and can enter the block chain, so that some wallet software can handle them normally. Another meaning refers to trading bitcoin contracts, just like futures trading in the stock market, which can be long and short.
D. How to do long-term bitcoin contracts
Open a quarterly contract, open a small position first, and then increase the position every time it falls and pulls back
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E. 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.
Reminder: The above information is for reference only and does not represent any advice.
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F. What is Bitcoin contracts
Basics of Bitcoin contracts
Bitcoin contracts are transactions that can be made without actually owning Bitcoin.easy 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.
G. 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.
(7) Seven Bitcoins for contract expansion 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.
H. 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 is the Bitcoin contract, so that many times the platform does activities are about cooperation.�Users, and then if you are on it, you can enjoy the corresponding benefits.
I. Is it illegal to pull people into bitcoin contracts?
It is not illegal to do bitcoin business, but don’t use bitcoin to do illegal things.
The nature of Bitcoin is clarified, and it is believed that Bitcoin is not issued by the monetary authority, does not have currency properties such as legal compensation and mandatory, and is not a real currency. In nature, Bitcoin is a specific virtual commodity that does not have the same legal status as currency, and cannot and should not be used as currency in the market. However, Bitcoin trading is a commodity buying and selling behavior on the Internet, and ordinary people have the freedom to participate at their own risk.
In order to avoid excessive speculation in the name of “virtual currency” for virtual commodities such as Bitcoin and damage the public interest and the legal tender status of the RMB, the “Notice” requires financial institutions and payment institutions to correctly use the concept of currency in their daily work. Focus on strengthening the education of the public’s currency knowledge, and incorporate concepts such as a correct understanding of currency, a correct view of virtual commodities and virtual currency, rational investment, reasonable control of investment risks, and maintenance of their own property safety into the content of financial knowledge popularization activities, and guide the public to establish a correct attitude. Currency concept and investment concept.
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