What is the total open interest of bitcoin contracts

Ⅰ What is open interest

Open interest, also known as open volume or open contract volume, refers to the amount that has not been hedged and physically delivered after buying or selling The quantity of a commodity futures contract. The buyers and sellers of open contracts are equal, and the domestic open interest is calculated by the total number of buyers and sellers. If both buyers and sellers open new positions, the open interest will be increased by 2 contracts; if one of them is a new open position and the other is closed, the open interest will remain unchanged; if both buyers and sellers are closed, the open interest will be reduced by 2 contract volume. When the number of positions opened and closed next time is equal, the open position will also remain unchanged. Since the open interest is the number of contracts that have not been hedged and settled during the period from the start of trading of the futures contract to the calculation of the open interest, the larger the open interest, the sum of the closing trading volume and the physical delivery volume of the contract before expiration. The bigger it is, the bigger the volume. Therefore, analyzing the changes in open interest can speculate on the flow of funds in the futures market. An increase in open interest indicates that funds are flowing into the futures market; otherwise, it indicates that funds are flowing out of the futures market.

Ⅱ What is a Bitcoin contract

Basics of a Bitcoin contract

A Bitcoin contract means that a contract can be executed without actually owning Bitcoin. The contract for the transaction. 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 What are the positions and the amount that can be closed in the Bitcoin perpetual contract?

The number of contracts currently held by the user, and the trading unit can be switched to currency , number of coins in positions = face value * number of sheets / latest transaction price 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 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. The 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 returns 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 premium and discount standards of substitutes, delivery location, delivery month and other terms are standardized, making futuresContracts are 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 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.

IV What is the system that specifies the maximum number of power positions and the maximum number of total positions?

Position limit refers to the exchange-specified member or client’s limit to a certain position. The maximum number of positions on one side of the contract. If the same client opens positions with different members, the total amount of unilateral positions held in a contract shall not exceed the position limit of the client. The main purpose of implementing the position limit system is to prevent manipulation of market prices and to prevent market risks from being excessively concentrated on a small number of investors. The specific regulations on the position limit of customers and members are as follows: (1) The unilateral position limit of a certain contract of a customer account for speculative transactions is 100 lots. The positions of client accounts for hedging transactions and arbitrage transactions are implemented in accordance with the relevant regulations of the exchange, and are not subject to the limit of 100 positions. (2) If the total unilateral open interest of a contract exceeds 100,000 lots after settlement, the clearing member shall not exceed 25% of the total unilateral open interest of the contract on the next trading day. For members or clients who really need to use stock index futures for hedging, they can apply for a hedging quota according to the relevant requirements in the Exchange’s hedging management measures to exempt the position limit.

VI Total futures lot and open interest

Total lot is the trading volume. Generally, one transaction is counted as two volumes, which is the trading volume in a certain period of time;
The open interest is cumulative. Since the listing of the contract, the total amount of all open positions, half of which are more than one, and half of which are empty. The transaction will not necessarily increase the open interest. If both buyers and sellers open positions, the open interest will increase. 2. The transaction increases by 2; one opens and one closes the transaction, the open interest remains unchanged, and the transaction increases by 2; if both buyers and sellers close the position, the open interest decreases by 2 and the transaction increases by 2.

VII 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, 796’s newly launched 50 times leverage (ie 2% margin), it means that investors can invest 1 Bitcoin to buy 50 Bitcoin futures contracts (ie 50 times leverage);

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) What is the total open interest of Bitcoin contracts? Extended reading

A futures contract is where a buyer agrees to receive an asset at a specified price after a specified period of time, and a seller agrees to deliver it at a specified price after a specified period of time.Agreement for �� assets. 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.

VIII What are the user’s open interest and trading volume of contract big data

If the trading volume increases and the open interest decreases in a short time after the market fluctuates violently, then the Indicates that most positions are closed or forced to close. If the trading volume surges and the open interest surges at the same time, it means that the opening and opening of positions surges at this time, and the active buy/sell indicators can be integrated to observe the direction and trend of the active position opening at this time.

IX What is net position

Net position refers to the net value obtained by subtracting the short position from the main long position, and is generally used to describe the institutional long position. Concentration of short positions. For example, according to the Zhengzhou Commodity Exchange’s position data for the white sugar sr1105 contract on December 3, the top 20 main long positions held 47,418 contracts on that day, and the top 20 main short positions held 44,868 contracts, so the net position was 5,250 contracts. From this, it can be concluded that the main trend of the current market is bullish sugar.

X 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.

Response time: 2020-12-16, please refer to the official website of Ping An Bank for the latest business changes.
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