Bybit is a global cryptocurrency derivatives trading exchange dedicated to creating a fairer, safer and more human investment environment for cryptocurrency traders. The platform currently offers BTC/USD and ETH/USD perpetual contract products to meet the needs of cryptocurrency traders.
What is a Perpetual Contract?
Perpetual contracts are an innovative form of financial derivatives product based on traditional futures contracts. However, they are unlike traditional futures products with an expiration date, because these are vulnerable to market manipulation, buy long/sell short manipulation, periodic liquidation, and other problems. Perpetual contracts are a new type of cryptocurrency derivative without an expiration date, falling somewhere between traditional spot contracts and future contracts. Traders can buy long or sell short, easily avoiding swap risks after expiration. This makes perpetual contracts a financial investment product that is very suitable for cryptocurrency derivatives.
What is Spot Trading?
Spot trading is the oldest method of trading. Typically, it takes the form of bartering or paying cash on delivery. There are many forms of spot trading, like agricultural product, small wholesale and retail trading, etc.
Example: David buys a pound of pork from Wang in the market for 100 Yuan. The money is paid for and the goods delivered on the spot. This is a spot transaction.
What are Futures?
Futures contracts, or simply futures, are transactions conducted over a period of time. A futures contract is an agreement whereby the buyer agrees to receive a product at a product at a certain price after a certain period of time, and the seller agrees to deliver said product at that price at that time. This is a futures contract.
Example: David expects that during National Day a month from now, pork will increase in price due to market demand. Therefore, he makes a proposal to Wang: The price of pork is currently 100 Yuan/pound. In a month, I’ll buy 20 pounds from you for 110 Yuan/pound. The two parties reach an agreement, and the futures contract takes effect.
Bybit Perpetual Contract Core Strengths:
1. Simultaneous Support for BTC & ETH Perpetual Contracts Satisfies the Various Needs of Traders
BTC and ETH occupy half of the cryptocurrency derivatives trading market, and are the two most popular currencies used in market transactions. The Bybit cryptocurrency derivatives exchange supports both BTC/USD and ETH/USD perpetual contracts to meet the actual trading needs of cryptocurrency traders.
2. The Market Price is Locked with the Spot Price, Preventing Forced Liquidation
Real-time retrieval and calculation of the spot price on global mainstream exchanges is referenced while marking Bybit’s market price. This comprehensive price becomes the mark price, forming the market price/mark price dual-pricing mechanism. Bybit only closes on the mark price, ensuring fairness of the trading environment and preventing forced liquidation.
3. No Clawback System for Liquidation Ensures Investors Profit
80% of trading platforms adopt a full account clawback system, consolidating all of the losses from the liquidation orders into one statistic and forcing the profit earners to bear the losses. This model directly affects traders’ interests. Bybit is different because it adopts an insurance fund and auto-deleveraging system to compensate position loss through the insurance fund. Once the insurance fund is exhausted, the auto-deleveraging system is activated, a double-guarantee that will ensure all traders can avoid losses and ensure profits.
4. 100:1 Adjustable Leverage: Greater Investment Returns with Lower Investment Costs
Bybit offers 1:100 flexible leverage, allowing traders to flexibly adjust according to their needs, including automatic position adjustment after opening. For instance, when a trader with high leverage is in a loss state, he can prevent liquidation by adding a margin or lowering the leverage, when the trader is in a profitable state, the leverage can be increased to increase the rate of return. 100:1 flexible leverage means flexible control of investment costs and greater returns on investments.
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