Bingbon — Trading Lessons: Intro to Contract Trading
Bingbon is a Contract Trading Platform, allowing users high speed, secure, low fee and accurate contract trading across various market pairs, including cryptocurrencies, global indices, forex and commidities.
Bingbon also allows users to “Copy” traders, so that they can allow other traders to invest their money on their behalf.
Contract trading is a little different to traditional cryptocurrency investments, so let’s answer the question: What is Contract Trading?
What is Contract Trading?
Contract trading allows traders and investors an opportunity to profit from price movement without owning the underlying asset.
A traders profit/loss is calculated by the asset’s movement between trade entry and trade exit, counting only the price change without consideration of the asset’s underlying value.
Advantages of Contract Trading on Bingbon
Contract trading provides higher leverage than typical trading, which has the potential for faster and higher profits and losses.
For example, in a conventional trade, if I want to invest in 1 Bitcoin, I will need to have $7,000 USD in cash. If the price moves up or down by 5%, the value of my investment will move up or down 5% as well.
For an investment of $7,000, if the price increases by 5%, I have made $350 in profit, or 5% profit (excluding fees).
In a leveraged contract trade, if I think the price of Bitcoin is going up, and I want to go long 1 Bitcoin, I can choose to pay $7,000 USD, or I can use leverage, reducing the cash needed to trade.
Let’s say I want to use 10X leverage. I only need $700 USD to open a contract of 1 Bitcoin at a price of $7,000.
If the price of Bitcoin goes up 5%, my 1 Bitcoin contract is now worth $7,350.
So for an investment of $700, I have made $350 in profit, or 50% profit (excluding fees).
Lower margin requirements mean less capital outlay for the trader/investor, and greater potential returns. However, increased leverage can also magnify losses.
Trading can be time-intensive. Research, analysis and monitoring trades take a long time to learn, and a lot of time to do.
Using the Bingbon Community, you can see traders’ history, profit rate, best and worst trades, and much more. If you like the trader, you can follow all of their trades, and only pay an 8% profit share when you make a profitable trade!
Copy Trading is great for users that want to trade contracts but don’t necessarily have the time or expertise to make the best trades that they can. It’s like having an investment manager in your pocket, without the 2 and 20.
Compared to traditional cryptocurrency trading, contract trading is very fast, as there is no need to send and receive cryptocurrency between parties, such as wallets or exchanges. This instant trading increases the ability of traders to take advantage of short term trading opportunities that are not possible with traditional cryptocurrency trading.
Compared to traditional cryptocurrency trading, the fees associated with contract trading are much lower. Users pay a small fee to open a trade, and pay a small interest fee on any Leverage that they borrow from the Trading Platform.
Shorting and Borrowing Stock
In traditional cryptocurrency markets, you are not able to short a cryptocurrency. Crypto contracts can be shorted at any time without borrowing costs because the trader doesn’t own the underlying asset.
Automated Trading Execution
In contract trading platforms, you can set advanced parameters that determine when you would like to execute trades. For example, in the Bingbon Contract Trading Platform, you can set the Long/Short Price, Margin, Stop Loss/Take Profit. Soon there will be more Automated Trading Execution options, such as Trailing Stop Loss/Take Profit.
Our question is simple. If you believe in cryptocurrency, why aren’t you trading contracts?
Increase your profitability, copy trade from the best users, and enjoy lower fees. Easy.
Register for Bingbon today to enjoy $100 in free trading credit: https://invite.bingbon.com/ZSUGPI
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