The Bitcoin Core [BTC] derivative has no expiry and delivery features. It offers daily settlements, allowing customers to be able to hold their positions indefinitely. At the first phase, the Perpetual Swap will support BTC with a maximum 100 times leverage.
With each swap contract holding a notional value of %100 equivalent in BTC, traders can either choose to short a position to profit from decline in the price of BTC or a long a position to profit from an increase in BTC’s price.
The product also comes designed with advanced risk management features. These include: a ‘tiered maintenance margin ratio’ that allows traders with open positions to adjust their leverage according to their risk appetite and market conditions, and a ‘marked price’ mechanism to help traders avoid unnecessary liquidations at times of high volatility.
Launched earlier this month by the Malta based crypto exchange platform, Perpetual Swap is a P2P virtual derivative that allows users to be able to bet on the direction of the price of digital assets, which is actually the value of OKEx’s Bitcoin [BTC] to U.S. dollar [USD] index. It has a mechanism that is very similar to Futures Contract, but as said before, has neither expiry nor daily settlement.
Another distinguishing point aside from delivery and expiry is the mark price. The mark price is used to calculate the Unrealized Profits and Losses [UPL] of other users in order to lower excess liquidation when the market situation is volatile.
In terms of daily settlements, the 100 times leverage compares to the 10 times commonly available in traditional capital markets. OKEx sees this as the road towards reduced trading costs. The settlements will occur daily at 04:00 and 16:00 UTC with its trading price being closely anchored to the spot market price.
OKEx is a digital asset trading platform launched by OKCoin.com. The exchange is a branch of OKCoin, which stopped trading operations on May 30th last year. It provides support to hundreds of tokens, hence serving millions of users across the globe using the blockchain technology.
The exchange is also planning to add swaps between different cryptocurrencies in the future.
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