Today we will tell you about the basis of trading futures contracts in the crypto market based on the example of Onederx exchange.
This is one of the few crypto-exchanges, which allows you to trade futures on BTC (ticker BTCUSD_P), using long and short contracts and margin support at the same time with an effective leverage up to X20.
In contrast with the well-known Bitmex, there is a much higher speed of order processing (placing/closing). Also there are no situations when, due to increased activity, the exchange ceases to accept orders for adding/partial or complete closing of positions (I’m sure you are familiar with this situation, when it is impossible to perform an action and it remains only to observe how your position is liquidated).
And one more thing…
Good, isn’t it?
For those who don’t realize, I will explain: a commission of those traders who is taking orders on Onederx is negative!
A few words about futures theory
Let’s talk about futures trading and your opportunities when using that sort of trading.
First of all, let me briefly explain the futures contracts for those who doesn’t use them, doesn’t know about this possibility
Futures — a financial instrument also called derivative (“der” in the name of the exchange Onederx), the essence of which is in the conclusion of the contract with its subsequent execution under the stated conditions: one party to this contract undertakes to buy, and the other — to sell a certain amount of the underlying asset within a specified period at a fixed price.
For example, today we conclude a contract for BTC at the price of $4000 for 1BTC in April 2019. If the price of BTC in April is 3900$, then we lose 100$ in relation to the market (since we have pledged to buy 1BTC for 4000$), if 4100$ — the second side of the transaction sells us 1BTC cheaper than the market for 100$ and we can immediately sell BTC at the market price.
There are delivery futures (assuming the actual supply of goods) and settlement (speculative, because the actual supply of the asset is not provided, and the calculation between the participants is made exclusively in cash).
Supply contracts are currently rarely used so the main type of futures contract is settlement. On Onederx, as well as Bitmex, literally speaking, futures perpetual contracts are traded, which are called “swaps” (swap).
A swap is a derivative financial instrument, a contract between two parties under which one party sells the asset and the other simultaneously undertakes to buy it back at a fixed price.
In practice, the most important difference is that working with futures trader becomes the owner of the asset, but trading swaps he earns only on changes in the price of the asset, not having the asset itself.
Now we turn to practice
How can we take advantage of such contracts in practice? Let’s start from the beginning — with registration, and then give real examples.
1.Sign up for Onederx is very easy, just go to https://trade.onederx.com/ and select register in the upper right corner.
Next, enter your Email and password. Now you can move on to the next step.
2.Deposit your trading account by clicking on the menu as shown below. Use the address that appears to send BTC to your Onederx wallet. Be noticed that trading on Onederx is going exclusively in BTC, there are no fiat pairs or altcoins at the moment, but it will be implemented in the future.
3.You can create long orders and earn while price rises up, as well as short orders and earn on the price goes down at any time, without waiting for the date end of the contract (expiration). To do this, use the Buy (Buy) or Sell (Sell) buttons.
4.You can hedge to compensate the risks of open positions of one instrument (in this case — BTC) in different markets, taking the opposite position on Onederx.
For example, you have opened a long-term contract for BTC, but you are afraid that the price will go opposite direction. Then, you open a short-order for the same amount (or entirely at your own expense, or part of them, using leverage). If the price rises up, you close the short-order, and getcompensated for losses due to the growth of the BTC price. If the price goes down, you get compensated for the exchange rate difference by increasing the number of BTC.
5.You can use leverage to reduce a risk of losing your own funds or trade funds that exceed your own up to 20 times. On Onederx, leverage is offered automatically at the time of placing an order: for example, if you have 1 BTC on the exchange, you can place an order up to 20 BTC.
Summarize
Let’s sum up and recall once again the advantages of trading an open-ended derivatives on Onederx:
- long and short positions
- leverage up to X20
- the highest speed of opening / closing orders, there are no “overloads” of the system
- easy registration, deposit and withdrawal
- ability to hedge risks on BTC
- instant execution of orders, no need to wait for expiration
Onederx is a modern crypto-exchange created by traders for traders, which has advantages over traditional (spot) exchanges, while devoid of the shortcomings of its competitors. The trading terminal is constantly being improved and becoming more user friendly from version to version.
· Detailed description of the contract
· An in-depth overview of the API
· Our official Telegram channel
