What is a perpetual contract for bitcoin
3. Option contract is a kind of agreement, which can give traders the right to buy or sell assets at a predetermined price before a specific date or on a specific date. Option contracts are trading derivatives that can be based on a wide range of underlying assets, including stocks and cryptocurrencies. These contracts may also come from information such as financial indicators. Generally, option contracts are used to hedge the risk of existing positions and speculative transactions.
the basis of bitcoin contract
bitcoin contract refers to a contract that can be traded without actually owning bitcoin. It is very different from the currency transaction which can only be carried out with the actual holding of digital currency
bitcoin contracts enable you to predict the price trend of bitcoin and hedge risks. This way of trading means that you are investing in price trends, not the assets themselves
when trading bitcoin contracts, you can decide whether to be short or long. Choosing long means that you expect the price of bitcoin to rise. On the other hand, choosing to short means that you expect prices to fall
leveraged trading
one of the characteristics of bitcoin contracts is that it can choose to trade with high leverage ratio. Using leverage means that you don't have to invest 100% of the transaction amount in a contract transaction. Instead, you only need to deposit the initial margin, which is only a small part of the total contract value
leveraged trading allows you to have a large exposure with a small amount of funds while managing risks
perpetual contracts
although there are many different types of contracts, this paper mainly focuses on perpetual contracts. As the name suggests, these contracts have no expiration date. Traders who are long or short with perpetual contracts can hold positions indefinitely unless the contract bursts, which means that they will not suffer more losses than the initial margin
in the perpetual contract, the pricing of bitcoin is based on a specific index price. The index price is based on the average price of bitcoin in multiple currency markets
bitcoin contract has become a very popular trading tool. Many traditional investors are not ready to allocate their money to digital assets, but still want to benefit from attractive price fluctuations, and contract trading opens the door for them
if you want to open bitcoin contract trading, you need to find the exchange that provides contract trading. AAX platform provides you with bitcoin contract trading services in a compliant and secure environment
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A:
perpetual contract is an innovative financial derivative, which is an upgrade on the basis of traditional futures contract. Different from the traditional futures contract, it has the characteristics of delivery date, market manipulation, killing short and killing many, fixed-point position explosion and so on. Perpetual contract has no delivery date, which is a new type of digital currency derivatives. It is between the traditional spot and futures contracts. Traders can buy long or sell short, which can avoid the risk of swap after the contract matures. It is a very suitable financial investment proct for digital currency derivatives.
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generally speaking, you need professional knowledge to tell you
usdt perpetual contract is a digital currency contract with usdt as the unit of valuation and settlement. At present, usdt perpetual contracts support the two-way trading of BTC / usdt, EOS / usdt and other contracts, and provide multiple leverage. The purpose is to allow high leverage to replicate the situation of the spot market. The contract will not be settled and can follow the reference index price of the target through the anchoring mechanism
as a pricing unit and settlement unit, usdt can trade BTC / usdt and other digital currency contracts without holding other digital currencies or only one digital currency of usdt, thus basically saying goodbye to the loss in the process of multi currency conversion. Of course, your profit is also settled in usdt. There will be only one asset in your usdt contract account< The main differences between perpetual contracts and term contracts are as follows:
- e date: each delivery contract has a fixed e date, and the delivery price is the index weighted average price one hour before delivery; The perpetual contract has no e delivery date and will never expire
- capital cost: since there is no e delivery date, perpetual contracts need to anchor the spot price through the "capital cost mechanism"
- mark price: mark price is used in perpetual contracts to calculate the unrealized profit and loss of users, effectively recing unnecessary frequent position explosion when the market fluctuates
- settlement every 8 hours: through settlement every 8 hours (04:00, 12:00 and 20:00 Hong Kong time), the unrealized profit and loss will be converted into realized profit and loss, so as to improve the flexibility of capital use
- ladder maintenance margin rate system: maintenance margin rate refers to the minimum margin rate required by the user to maintain the current position. When the margin rate is lower than the maintenance margin rate, it will trigger position explosion or forced partial rection. For users with different positions, the system of step maintenance margin rate is implemented, that is, the larger the user's position is, the higher the maintenance margin rate is, and the lower the user's optional maximum leverage ratio is
- compulsory partial closing: for users with large positions and at Level 3 or above, when the margin rate is lower than the current level maintenance margin rate, but higher than the minimum level maintenance margin rate, they will not directly blow out all their positions. The system will calculate the number of pieces needed to rece the position by two positions, and carry out partial rection. After the successful downshift, if the margin rate meets the requirements of the maintenance margin rate of the new gear, part of the position rection will stop; If it still does not meet the requirements of the margin rate of the new gear, it will continue to cycle part of the position rection process. In the warehouse by warehouse mode, in the process of compulsory partial rection, the position is frozen and cannot be operated; Under the full position mode, in the process of compulsory partial position rection, the currency account of perpetual contract is frozen and cannot be operated.
