The emergence of digital currency is actually not an accident. Although the current digital currency is not yet a currency, digital currency does gradually evolve from it. The reason why Bitcoin takes the lead among digital currencies is actually mainly because its total amount is fixed and scarce, and the demand for Bitcoin has increased significantly in recent years. Many investors now regard Bitcoin as a new investment method, and digital currency contracts have become a Bitcoin derivative service that investors like very much. Many investors want to know how to make Bitcoin contracts profitable? Let me tell you about it below.
In the contract trading of digital assets, we can choose to go long or short the underlying asset to gain profits based on the price fluctuations of the market.
Going long means that investors expect that the market will rise in the future and buy a certain number of digital asset call contracts.
Take Bitcoin contract trading as an example. When the price of Bitcoin is 5,000 US dollars per coin, we buy a contract worth 1 Bitcoin. If the price of Bitcoin rises to US$5,500 per coin, we will sell the contract worth 1 Bitcoin and obtain a profit of US$500.
On the contrary, short selling means that investors expect that the market will fall in the future and sell a certain number of digital asset put contracts.
Take Bitcoin contract trading as an example. When the price of Bitcoin is 5,000 US dollars per coin, we sell a contract worth 1 Bitcoin. If the price of Bitcoin drops to 4,500 US dollars per coin, we buy Enter a contract worth 1 Bitcoin and get a profit of US$500.
Investing in spot trading means that profits can only be made when the spot price rises; investing in contract trading means that you can make profits by going long or short regardless of the price of the underlying object fluctuating upward or downward.
Bitcoin contract liquidation can make money
For example, the current price of Bitcoin is 10,000 US dollars
1. Suppose you use 2,000 yuan to open a long position with 20 times leverage
2. At the same time, open a put option hedging on BitOffer (cost of 20 US dollars)
✅ The first method, when Bitcoin rises by 500 US dollars, the increase is 5%
1. Go long with 20 times leverage and make a profit of 100%, which is 2,000 yuan
2. The put option loses the principal, which is 20 US dollars (140 yuan)
3. 2000-140=1860 Yuan (net profit)
✅ The second type, when Bitcoin drops by 500 US dollars, that is, the drop is 5%
1. Go long with 20 times leverage, the contract will be liquidated, and the loss will be 2,000 yuan
2. The put option profit is 500 US dollars, which is 3500 yuan
3. 3500-2000-140=1360 yuan (net profit)
Arbitrage (spreads): refers to buying and selling two different types of futures contracts at the same time. Traders buy contracts that they think are "cheap" and sell those "high-priced" contracts at the same time. Hedging refers to the principle that the months are the same or similar in order to avoid foreign exchange risks, interest rate risks, and commodity price risks. This principle requires investors to choose futures when performing hedging operations. Contract.
1. Blockchain is indeed the general trend. Investment in blockchain can be carried out from the following aspects: 1. Enter the blockchain industry. 2. Cooperate with the district The digital currency market is born half of the blockchain, and various digital currencies such as Bitcoin, Ethereum, Litecoin, etc.
2. The currency circle contract can be played, but the currency circle does not recommend it to newcomers in the currency circle The main reason for playing contracts is that novices have not experienced the ups and downs of the currency circle and have limited psychological endurance.
When making contracts, first of all, you must have a stable mentality. After losing money, you must not be like a headless fly. You must learn to review the market and sum up the lessons; secondly, you must not be too greedy and know how to make a profit; you must know how to stop losses in time and do not go against the grain. potential operation. Fourth, watch more and move less when trading sideways. Find the correct position to enter the market. Here’s a little tip: if the index has been falling for a long time and is currently in a sideways market, and the index keeps falling and does not reach the previous low, it means that the previous low is a support level, which is an opportunity to go long; the same is true when it rises. If it keeps rising but cannot reach the previous high, it is an opportunity to go short.
3. Arbitrage is also called "interest arbitrage". There are two main forms:
(1) Non-cover arbitrage. That is to take advantage of the interest rate difference in the capital markets of the two countries to transfer short-term funds from the low-interest market to the high-interest market to obtain interest rate differentials.
(2) Cover arbitrage. That is, arbitrageurs use forward foreign exchange transactions to avoid the risk of exchange rate changes while transferring short-term funds from place A to place B for arbitrage. Arbitrage activities will change the supply and demand relationship in different capital markets, make the interest rates of short-term funds in various places consistent, narrow the difference between the currency's recent exchange rate and the forward exchange rate, and maintain the interest rate difference between the capital market and the foreign exchange market. balance, thereby objectively strengthening the integration of the international financial market.
Bitcoin trading hours are 7*24 hours without rest. Unlike financial stocks and stock markets, which are closed during holidays, Bitcoin can be operated 24 hours a day without being restricted by time or geographical restrictions. To purchase overseas cryptocurrencies, you only need an internet connection and a supported exchange.
All Bitcoin transactions are completed online, and there is no need to conduct transactions through offline physical outlets. Therefore, Bitcoin transactions will not be restricted by national borders. As long as they are on the Bitcoin trading platform, they can be traded all over the world. Bitcoin transactions can be realized.
It is precisely because of the online nature of Bitcoin transactions that Bitcoin has global characteristics, and its circulation around the world is very convenient. Bitcoin transactions can be completed as long as there is an Internet connection. Previously, Tesla also allowed users to use Bitcoin to purchase Tesla cars. Users can obtain Tesla cars as long as they pay Bitcoin, which reflects the globalization of Bitcoin transactions.
I hope everyone can understand through this article how to make Bitcoin contracts profitable. Although Bitcoin contracts are a very popular investment product now, because the risks of Bitcoin contracts are too high, it is best for everyone to fully understand its trading rules and trading methods before investing. We know that Bitcoin contracts may be liquidated. The position may be liquidated due to failure to fulfill the margin call obligation, or the position may be liquidated because the position is too heavy. Everyone is too impatient in the process of contract trading. Frequent transactions. In addition, everyone must set a good stop loss to prevent themselves from suffering too serious losses.
The above is the detailed content of Bitcoin Contract Secrets: How to Make Bitcoin Contracts Profitable?. For more information, please follow other related articles on the PHP Chinese website!
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