A user earned $135 in three days with a principal of $10, which means an earnings rate of 13.5x. He described the trading experience of Delivery Contract on 58COIN to me: I shorted BTC at 12,155 with a principal of $10 and used a 100x leverage, and closed the position until the market fell to 10,513, making a profit of approximately $135.
What is the Delivery Contract? How to trade it?
What is the Delivery Contract?
The delivery contract is a digital currency contract that is delivered on a regular basis with USDT as the quote and settlement currency, the price of which is all formed by the market mechanism. Instead of using the index, the profit and loss are calculated using the last transaction price. Currently, the delivery contract is a six-month contract, the settlement occurs every Friday at 17:58 (UTC +8), and will be delivered at 17:58 (UTC +8) on the last Friday of the six-month period. The seven cryptocurrencies including BTC, EOS, ETH, LTC, XRP, ETC, and TRX involved in the delivery contract will be delivered at 17:58 (UTC +8) on July 26, 2019. Besides, the BNB delivery contract will be delivered at 17:58 on October 25 while the delivery of HT will occur at 17:58 on November 15.
Some may ask, is it necessary to use USDT as both the quote and settlement currency? Of course, in this way, investors can free from losses caused in the multi-currency conversion process, and trade the delivery contracts of various currencies including BTC, EOS, etc. Moreover, the long-term performance of USDT is relatively stable. Therefore, using USDT as the quote and settlement currency can reduce the risk brought by the depreciation of cryptocurrencies such as BTC, EOS, etc., and avoid the occurrence of an increase in the amount of the currency while declining in asset value.
How to Trade a Delivery Contract?
The lucrative method of the trading delivery contract is long when investors expect the upward price movement, otherwise short if the market sentiment is bearish, and realize an increase in the potential return by using leverage. Then how to trade a delivery contract? Let’s take a look at the basic operations.
Transfer a certain amount of USDT from Deposit & Withdraw Account or OTC Account to the Delivery Account.
2. Allocation of Funds
Since the delivery contract adopts the isolated margin model, if to trade a certain currency contract, investors need to transfer assets manually from the Delivery Account to the corresponding sub-account in advance. Taken BTC as an example, the following figure shows transfer USDT to the sub-account of BTC.
3. Open a Position
After allocating funds, then you can open a position. Currently, there are nine contract categories supported by the delivery contract: BTC, EOS, ETH, XRP, LTC, ETC, TRX, BNB, and HT. As shown in the figure, you can place an order for the preferred contract type in the area marked with a red box on the left, and enter “Leverage”, “Price”, “Position (Lots)” on the lower right, then click “Open Long” or “Open Short”. Thus, a buy/sell order will be successfully submitted.
If the order is not filled immediately, you can see the details in “Orders” of the “asset area”; if the order is executed immediately, it means that you have successfully opened a position. Users can view transaction details in “Executed” and check “Avg. Holding Price”, “Margin”, “Unrealized PNL” and other information in “Positions”. Besides, “Stop Loss” and “Stop Profit” are also supported.
4. Close a Position
If you want to close positions, click on “Positions” and select “Close” or “Close All”. The realized profit and loss got from the closing of positions can only be taken out after the settlement.
The above-mentioned is the basic operation of trading a delivery contract. The advanced operations like opening positions with the unrealized profit, two-direction positions will be introduced in the following-up articles.