By Kigara - 16.01.2020
Bitmex perpetual contract explained
This guide is meant to explain the concepts of unrealised and realised profit and loss (PNL). Example 1, Buying and Selling. Perpetual Contracts. Example 2. Inverse Perpetual Contracts · Quanto Perpetual Contracts BitMEX offers several of its trading products in the form of a Futures Contracts with cash settlement.
It's not exhaustive, it only useful intuitions.
Bitmex perpetual contract explained accepts Bitcoin only, and settle contracts in BTC, so you only own, gain or loses Bitcoin, but you trade or gamble in other cryptocurrencies. You bitmex perpetual contract explained this amount to grow in the same way as the price of BTC-USD when you buy the contract or in the opposite direction when you sell the contract.
Each contract is worth 1USD, so When you buy 1 https://idcatalog.ru/2019/tron-trx-2019-prediction.html The same is true if you bitmex perpetual contract explained before buying. This is the click of BTC' and is usually slightly different from the 'price of the bitmex perpetual contract explained.
When the price of the contract is less than price of BTC, users with a long position get paid the bitmex perpetual contract explained rate so you have an incentive to buy the contracts, this push up the price of the contract thus realigning the price of the contract with the price of BTC-USD.
At the same time users with short position will pay the same amunt of funding rate, so https://idcatalog.ru/2019/bittrex-xvg.html have an incentive to reduce their position by buying contractsand this also tend bitmex perpetual contract explained push up the price of the contract to match the price of BTC.
The funding rate is a zero sum game: longs pay shorts X or viceversa; bitmex does not get any fees read more of the funding rate.
When the price of the contract is more than the price of BTC, the opposite happens: users with long position pays users bitmex perpetual contract explained short position, this gives an incentive to sell the contract, pushind down its price to be closer to the price of BTC.
The amount of funding rate you receive or pay is proportional to the difference between the price of the contract and the price of BTC. The actual computation is bitmex perpetual bitmex perpetual contract explained explained complex and visit web page of the scope of this article, until someone find an intuitive way to describe it.
You'll find examples here. When is the funding rate charged? What does it means?
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