Do you know what a contract exchange is? What is contract trading? Please watch the following
[This article is organized by mkz888z]
1. What is a contract trading app system
Contract transaction refers to an agreement between the buyer and seller to receive a certain amount of a certain asset at a specified price at a certain time in the future. The buying and selling objects of contract transactions are standardized contracts uniformly formulated by the exchange. The exchange stipulates standardized information such as the type of commodity, transaction time, and quantity. The contract represents the rights and obligations of the buyer and the seller. To put it simply, it is now an appointment to trade a certain amount of a certain commodity at a certain time and place in the future.
Contract trading is a kind of financial derivatives. Compared with spot market trading, users can judge the ups and downs in futures contract transactions, choose to buy long contracts or sell short contracts, to obtain benefits from price increases or declines.
Second, the role of contract trading platforms
The original intention of the standardized contract design is to hedge against spot risks. In order to lock in the cost of revenue and hedge against the risk of sharp fluctuations in spot prices, companies or individuals engaged in commodity trading will place short orders (long orders) for the same position in the futures market. Used to resist risks.
Digital asset contract transactions represented by Bitcoin usually adopt spread delivery. When the contract expires, the system will settle all coal positions at the delivery price.
Third, the rules of the contract trading system
1. Trading Hours
Contract trading is 7*24 hours trading, and trading will only be interrupted during settlement or delivery at 16:00 (UTC+8) every Friday. In the last 10 minutes before delivery, the contract can only be closed, not open.
2. Transaction Type
There are two types of transactions, opening and closing positions. Opening and closing positions are divided into two directions: buying and selling:
Buy open long (bullish) refers to buying a certain number of new contracts when users are bullish on the index. Carry out the "buy open long" operation, and the long position will be added after the match is successful.
Selling and closing long (multiple orders closing) refers to the selling contract that the user is no longer bullish about the future index market and making up for it, and offsetting the exit from the market with the current holding of the buying contract. Carry out the "sell to close the long" operation, and the long position will be reduced after the match is successful.
The open short (bearish) selling of the contract exchange system refers to the new sale of a certain number of certain contracts when users are short or bearish on the index. Carry out the "sell to short" operation, and the short position will be added after the match is successful.
Buying for nothing (closing a short position) refers to a buy contract that a user is no longer bearish on the future index market and makes up for it, which is hedged with the current selling contract to offset the exit from the market. Carry out the "buy out of thin air" operation, and the short position will be reduced after the match is successful.
3. How to place an order
Limit order: Users need to specify the price and quantity of the order. Limit orders can be used for both opening and closing positions.
Place an order at a counterparty price: If the user chooses to place an order at a counterparty price, the user can only enter the order quantity, not the order price. The system will read the current latest opponent's price at the moment of receiving this order (if the user buys, the opponent's price is sell 1 price; if it is sold, the opponent's price is buy 1 price), and place an opponent Price limit order.
4. Position
After the user opens the transaction, he has a position, and the positions of the same contract in the same direction will be merged. In a contract account, there can only be a maximum of 6 positions, that is, the current week contract long position, the current week contract short position, the next week contract long position, the next week contract short position, the quarterly contract long position, and the quarterly contract short position.
5. Order Restrictions
The platform will limit the number of positions held by a single user in a certain period of contracts, and the number of orders for a single open/closed position to prevent users from manipulating the market.
Exchange development When the number of user positions or commissions is too large and the platform believes that it may cause serious risks to the system and other users, the platform has the right to require users to adopt risk control measures including, but not limited to, withdrawal of orders and liquidation of positions. The platform has the right to adopt measures including but not limited to restricting the total number of positions, restricting the total number of orders, restricting open positions, withdrawing orders, and forcibly closing positions for risk control.
[This article is organized by mkz888z, please feel free to communicate! 】