ETH/USD Futures Trading
Profit from the price movement of the eth/usd pair by using our DApp to bet on the future direction of eth/usd. Depending on the duration of the contract, bets can be made 24 hours, 3, 7, 14 days into the future. The most important concepts you need to understand before using the DApp is described as follows.
Leverage
The DApp provides a maximum leverage of 3,200%. Thus, if you deposit 1 ether of trading capital, you get 32 ether of leveraged capital . Your leveraged capital is what you place in the order book. All or some of this leveraged capital can be matched in the order book. The matched amount is called the matched leverage capital and this is what is used to calculated your trading profit & loss.
Contract Duration
Each futures contract has a start and end time expressed in ethereum blocks. The opening price (eth/usd) is derived using the timestamp of the start block and the closing price is derived using the timestamp of the ending block.
Note that no more trading can be done once the contract starts. The matching of buyers and sellers is done by the DApp during the trading period (usually 24 hours) which precedes the start of the each contract.
Maximum Profit & Loss
There is a maximum profit price and a maximum loss price. This means that regardless of the final eth/usd price at the end of the contract, your profit or loss is limited to the maximum amounts possible. This feature is configurable. The typical value is 3% up or down on the opening price.
If leverage is set at 3,200% and the maximum profit and loss is set at 3%, the profit you make on the futures contract is approximately 93% of the trading capital deposited. The reverse is true for maximum loss. Only deposit trading capital you can afford to lose.
Buy Ether Futures
If you think the price of eth/usd will go up at the end of the contract period, buy ether futures. From the above chart, you can see that the contract has a start and end time. At the end of the contract, the price is higher than the opening price, so you make a profit. However, the profit is capped at the maximum profit price (3% up from the opening price) even though the market price ended up higher.
Sell Ether Futures
Betting that the eth/usd price will fall at the end of the futures contract, you sell ether futures to profit from the anticipated fall. However, it doesn’t work out that way. At the end of the contract, the price is up instead of down. So, you make a loss on the trade.
Useful Links
Ether/Dollar Futures DApp -live on the Rinkeby Testnet
