What is a Short Position in Perpetual Contracts (How to Calculate Perpetual Contract Liquidation Fee)
What is a Short Position in Perpetual Contracts? An Introduction to Short Positi
What is a Short Position in Perpetual Contracts? An Introduction to Short Positions in Perpetual Contracts: In the current market, any trader who holds collateral such as BTC and ETH (e.g. BTC/USDT) can participate. Due to the low leverage rates in the current market, this method is very attractive to those who do not have enough positions. However, as the market develops, the demand for perpetual futures contracts is increasing, which has led to a continuous rise in perpetual contract prices and provided users with more choices.
According to the latest news, Binance, a perpetual exchange, has launched Bitcoin options products. It is reported that “going short” is a smooth price fluctuation. In this case, investors need to deposit funds at an appropriate time. If the buyer fails to take profit or sell in a timely manner, it will result in losses. A short contract refers to a situation where there is a profit after closing a position when the fluctuation range of the spot market exceeds a certain threshold. In other words, if at any given moment the profit is not enough to support a decline in the market, the trader can immediately sell the position to make a profit. Conversely, if there is a loss, it may lead to liquidation. However, closing a position can also cause greater panic or losses. (Bitmex Market Station)
How to Calculate Perpetual Contract Liquidation Fee
According to Contract Emperor market data, the trading volume of BTC perpetual contracts has increased by 370% in the past 24 hours. At the same time, the average daily trading volume of mainstream currencies such as ETH and EOS has reached a new low, and the average trading volume of BTC quarterly contracts has dropped to around $60,000.
According to Tianqi Capital, a real-time analyst at Contract Emperor, in terms of long positions, the BTC price has risen significantly, and the total position has increased. However, the price fluctuation of BTC is relatively small. Therefore, if the liquidation fees (transaction fees) were to be calculated based on the actual situation of BTC in the spot market, it would be calculated according to different indicators such as spot market liquidity and leverage level.
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