1. PixelPlaygroundHome
  2. Web3 News

What Does Coin-based Perpetual Contract Mean? (Will a 1x Short in Coin-based Perpetual Contract Result in Loss?)

• Web3 News • 99 views

What does coin-based perpetual contract mean? What is a coin-based perpetual co

What Does Coin-based Perpetual Contract Mean? (Will a 1x Short in Coin-based Perpetual Contract Result in Loss?)

What does coin-based perpetual contract mean? What is a coin-based perpetual contract? In English, Bitcoin traders use “BTC” or “ETH” to refer to their cryptocurrencies. But how does a coin-based perpetual contract work? Below, we will briefly introduce the specific operations of a coin-based perpetual contract.

The price of BTC/USDT off-exchange (in USD) is the spot price minus the current Bitcoin price of $10,000; what is the price of ETH/USDT on-exchange in USD? In other words, you buy a basket of currencies and sell a particular asset.

If an investor wants to transfer digital currencies from an exchange to another place without going through the exchange, they need to pay some fees. And these fees come from purchasing a specific cryptocurrency, such as XRP or BCH. When users use this cryptocurrency for trading, they receive a certain percentage of investment fees as commissions. These fees are relatively expensive for those who have not received investment rewards because these costs are usually borne by the platform and cannot be cashed out. Therefore, investors will incur losses when they hold these funds on the platform.

Therefore, coin-based perpetual contracts have the following characteristics: (1) After the settlement of fiat currency, the currency can be converted into other assets such as Bitcoin, Ripple, Monero, Litecoin, and EOS; (2) Small fluctuations, because of the greater market risks, will not result in losses, but due to its hedging characteristics, it is easily affected by prices; (3) Easily influenced by the market.

Will a 1x Short in Coin-based Perpetual Contract Result in Loss?

Editor’s note: This article is from BlockBeats (ID: blockbeats) and is authorized to be reposted by Odaily Star Daily.

Will a 1x short in coin-based perpetual contract result in loss? If yes, can I guarantee that you will not profit 100% from the loss? However, for most people, this is an impossible thing because many people say it is a gamble. But let’s take a look at those who place orders on the exchange! After all, now many contracts are leveraged trading, and they are opening long positions and closing them, and these contracts have no delivery date. So, everyone don’t worry:

1. Why buy spot? Actually, it is to buy things with a large fluctuation in price. For example, mainstream currencies such as Bitcoin and Ethereum all have an obvious flaw, which is that the market price fluctuates too quickly, leading to liquidation. This situation has been going on until this morning, and there has not been a fundamental change. In other words, when the market falls, investors tend to choose to buy, and then wait for the rise before selling again, causing capital losses, and thus triggering a liquidation event. This is what is called “arbitrage”.

2. If the price of the contract is lower than this value, then it will be difficult to short it.

3. If the contract price is higher than that value, then shorting will be easy.

4. Conversely, if the contract price is higher than that price, then you need to consider adding or reducing positions to reduce losses.

5. What if you want to continue holding or if you think it has stabilized?

6. If you think your holdings are in a loss state, you can buy coins at a price of about 2 times.

7. Suppose you hold BTC and ETH yourself, but at the same time, you do not know the risk level of other currencies. You may be surprised by the future trend because you will put all investment portfolios aside.

8. What is currently the most profitable investment product? That is DeFi.

9. Is there any way to make DeFi lending projects earn more income?

10. What other methods can make the COMP token on Compound easier to obtain?

This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/24255/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 08/16/2023 07:16
Next 08/16/2023 07:39

Recommended articles