1. What is contract trading?
Contract trading is different from spot trading such as currency trading and margin trading, and belongs to a kind of derivative of futures trading .
In contract transactions, the subject matter of the transaction is not the actual virtual currency or legal currency, but an agreement.
The content of the agreement is mostly stipulating that a certain commodity, currency or other product should be bought or sold at a predetermined price at a specified time in the future. They can be physical delivery or cash settlement.
To put it simply, I signed an agreement with the exchange to purchase a commodity at a specified time in the future, which is a contract transaction.
At the end of the contract, the exchange will deliver to me different commodities according to the subject matter of different agreements. For example, for a contract with BTC as the subject matter, BTC will be given to me at the time of delivery, and so on.
2. What is a perpetual contract?
There are currently two common forms of contract trading, namely delivery contract and perpetual contract . The specific differences between them are as follows:
As a form of futures contracts, perpetual contracts have the following three characteristics:
1. Never expire
2. Anchor the spot price through the "funding cost mechanism"
3. Use "Marked Price"
3. What are "funding cost mechanism", "spot index" and "marked price"?
First of all, everyone needs to clarify a concept. Contract transactions are financial derivatives. Therefore, its price fluctuations are different from those in the spot market. In other words, the "intraday price" of the contract transaction is not the price of the spot market.
However, if the gap between the intraday price and the spot market is too large, it will cause a disconnect, which is very unfavorable for users to judge market price fluctuations. Therefore, the contract market needs a reasonable and reliable price adjustment mechanism to make the intraday price converge. The price in the spot market.
a) How to judge the current standard price in the spot market?
The current mainstream method is to select the spot prices of 3-5 current mainstream virtual currency exchanges, calculate the "spot index" according to a certain weight ratio , and use this as the basis for market price adjustment and the reference standard for forced liquidation value.
Click here to understand the rules of spot index calculation
Click me to understand the computer system of forced liquidation
b) Since the large difference between the contract price and the spot price is not conducive to the judgment of the market price by contract users, the contract market needs a fair and just price adjustment mechanism to ensure that the difference between the intraday price and the spot price will not be too large. The mechanism is the "funding cost mechanism"
The fund rate is charged every 8 hours (every day at 08:00, 16:00, and 24:00). At that time , users who hold long and short orders in the market will be charged and charged based on the price of the "spot index" . A certain funding rate is subsidized, so that the intraday price converges to the spot price.
There are three situations in which the fund rate is collected:
Case 1: If the fund rate is shown as positive , users who hold long positions need to pay interest to users who hold short positions
Scenario 2: If the fund rate is negative , users who hold short positions need to pay interest to users who hold long positions
Situation 3: If you do not hold a position at this time (08:00, 16:00 and 24:00) , the system will not charge you any funds.
Click me to understand the computer system of fund rate
c) The "marked price" is a standard value obtained by adding the spot index and the fund rate, and its main function is to calculate the profit and loss of the account.
4. How to conduct contract transactions?
Through the previous study, we know that the contract transaction is not the commodity itself, but the agreement with a certain commodity as the subject matter. Therefore, the actual unit of contract transactions is (Zhang) , the following are the commonly used data of DRV platform contract transactions:
( Currency standard: 1 card=1USDT USDT standard: 1 card=0.001BTC/0.01ETH/1EOS )
After you have fully understood the above-mentioned basic content, please choose the corresponding tutorial to study according to the type of equipment you are using:
How to use APP for contract transactions
How to use the web for contract transactions
What should I do if I have a problem?
Click here to see how to contact Unet customer service
Warm reminder, beware of false customer service
1). Please do not provide account password, SMS, Google verification code, WeChat and bank card password to anyone, including Umifi exchange customer service
2). Please look for the official website: umifi.com
3). Click on the unofficial link, beware of computer poisoning information leakage
4). Umifi exchange staff will not ask you to transfer payment
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