BitCoke crypto Quanto Swap
Crypto assets are attracting a lot of attention these days. Many users trade crypto assets. However, apart from regular asset trading, there are various financial instruments available in the crypto market. One well-known instrument is crypto derivatives. They are an agreement between a buyer and a seller for the future value of a digital asset. Everyone involved in the transaction does not own the asset for which the contract is made. In this case, the subject of the transaction is the right to fulfil the contract.
In this article, you are introduced to Bitcoke cryptocurrency derivatives trading, learn about the Bitcoke cryptocurrency derivatives trading platform, and learn how to start earning with cryptocurrency BitCoke derivatives in South Africa.
What are derivatives, and why are they needed?
A derivative is a financial contract for the future price of a cryptocurrency, security, commodity or service. The subject of such a contract is called the underlying asset. Sellers and buyers of derivatives do not own the underlying assets but sell and buy the right to exercise the warrant.
What are derivatives for?
Derivatives are designed to reduce risk and capitalise on price movements. This is true for both traditional and cryptocurrency exchanges. Let's explain this with an example.
Trader X fears that bitcoin will fall to $40,000 by next Tuesday. So he can agree with trader Y to sell him bitcoins when the price drops to $45,000 thousand. This is how derivatives help reduce risk.
In another case, trader Y wants to buy bitcoins at $45,000 thousand by Tuesday. He can buy a contract from trader X. Trader X would then sell the bitcoins already to trader Y. Trader X will receive money from trader Y without waiting for the agreed price.
By selling and buying this contract, the traders can make money depending on the underlying asset's price. This is how derivatives are used to make money.
Types of cryptocurrency derivatives
Before we start trading Bitcoke crypto derivatives, let's get familiar with the types of derivatives.
Types of cryptocurrency derivatives:
- CFD (Contract for Difference)
Let's take a closer look at some types of derivatives.
What is a futures contract?
The futures contract is an agreement to buy or sell an asset at a predetermined price at a predetermined time.
For example, you live in a private house without gas and need coal. You go to the seller and say: "Let's make a deal that I will buy coal from you in six months for the current price". If he agrees, you have entered into a futures contract. If the price of coal goes up six months later, you are in the black, and if it goes down, you incur losses. However, you cannot back out of such a deal; it must be executed.
Futures contracts are concluded on stock exchanges. This is how you can enter into a contract to buy crypto assets.
What is an option?
An option is a stock market instrument, which gives its holder the right to buy or sell an underlying asset at a specified time and price.
It is a contract between the buyer and seller that specifies the price and expiry date of this contract. The option is the buyer's right to execute the transaction, not the obligation. That is the difference from the futures contract.
Company or commodity futures are a speculative futures instrument. They can be thought of as a bet, where one party believes that the price of a stock will rise while the other bets on it to fall. A simple conclusion is that one of the parties will always suffer a loss.
It is also worth understanding that a futures transaction does not equal the purchase of a stock. The holder of a share futures does not receive board rights or dividends.
What is a CFD?
A CFD (contract for difference) is a derivative for the price difference of the underlying asset. If the asset rises in value during the contract period, the seller pays the difference. If the price falls, the buyer pays it. Often, such contracts are open-ended and are closed by the party entitled to do so under the contract. For example, the shop promises to pay back the price difference if you find the same product cheaper.
Cryptocurrency CFDs are also available on the Bitcoke cryptocurrency derivatives platform.
BitCoke is a Hong Kong-based exchange registered in the Cayman Islands. It launched in 2019, with derivatives as the main feature. After its inception, BitCoke also released spot market, earn, and cloud mining products.
Like a few of its highlights, BitCoke has a high performance trading engine, superb liquidity, cold storage asset isolation and Quanto swap, delivering the best derivative trading experience across the exchange industry.
Quanto swap enables you to choose BTC/ETH/USDT as margin to conveniently leverage trade and settle all contracts available, a combination of USDT and inverse contracts. In addition to the Tradingview chart, BitCoke develops its proprietary chart for professional leverage traders. Finally, the Fund system enables the master account to perform asset management functions over affiliated subaccounts, like fund transfer, setting risk profiles, leverage, alert, etc.
BitCoke also supports a simplified OTC desk for fiat-crypto exchanges. With an OTC desk, you can execute larger trades without any risk of "slippage", The platform is not only available from the desktop. You can now also access it via mobile. Furthermore, it is "multi-terminal", which means all charts, positions, orders, layouts and drawings are synchronised simultaneously across different portals.
What do you get out of using Bitcoke derivatives trading platform?
Using BitCoke Quanto Swap in South Africa you will receive several advantages:
- Quanto Swap
Support any crypto as margin to conveniently trade all contracts available
- High Performance
Match trading by system memory, able to execute million level TPS transactions
- Superb Liquidity
Excellent market depth and low trading fee
- Asset Isolation
Cutting-edge cold storage safeguards asset security
BitCoke Trading View
Various exchanges have different trading views. And there is no “this resume is the best”-idea. You should yourself determine which trading view suits the best. The thoughts usually have in common that they all show the order book. Or at least part of the order book. They also offer a price chart of the chosen crypto and order history. They normally also have buy and sell-boxes. Before you choose an exchange, try to look at the trading view so that you can see that it feels right to you.
BitCoke Trading fees
Every trade occurs between two parties: the maker, whose order exists on the order book prior to the trade, and the taker, who places the order that matches (or “takes”) the maker’s order.
This exchange’s trading fees for takers is 0.03%. This fee is substantially below the historical industry average, which is arguably around 0.25%. We are today seeing more and more exchanges moving towards lower trading fees, and new industry averages are starting to form around 0.10%. But, obviously, BitCoke's taker fees are very low also in comparison with them.
BitCoke also offers trading fee discounts for makers, who trade at 0.02% (33% discount compared to takers). This maker/taker fee model promotes liquidity at the exchange and is an appreciated feature with this platform.
BitCoke Withdrawal fees
BitCoke charges a withdrawal fee amounting to 0.0005 BTC when you withdraw BTC. This is below the global industry average with roughly 40% (seeing as the global industry average BTC-withdrawal fee is 0.000812 BTC per BTC-withdrawal, at least when we did our most recent empirical study of withdrawal fees).
All in all, the fees here are low and thus also consumer-friendly.
To sum up
The main types of derivatives are options, forwards and futures. In simple terms, there is a real market for buying assets and a market in which there is a "stock-for-stock" market - a speculative market. The significant difference between the two markets can create a financial crisis. All derivatives are solely of speculative value.
- Derivatives can be divided into groups. The criteria for gradation into groups are formed based on which asset underlies the derivative.
- Index derivatives (based on indices).
- Currency derivatives (eurusd, usdjpy, etc.).
- Equity derivatives (derivatives based on a underlying company).
- Derivatives based on bonds of countries.
- Futures derivatives on commodities (oil, cotton, coffee, etc.).
These instruments are suitable for beginners for a number of reasons:
- The small incoming amount.
- The availability of a huge variety of derivatives. This quantity of derivatives allows the beginner to choose the most liquid type of derivative.
- The multitude of types allows you to not only choose the asset but also allows you to choose your trading tactics and execution (option trading, long term trading, short term trading, etc).
The selection of the derivatives directly depends on the strategy that the novice trader chooses and most importantly on the objectives he/she sets for himself/herself. There are high risk derivatives and conservative derivatives that rise or fall in value for a long time (Government bonds).
Due to its multi-dimensional and flexible nature, the derivatives market offers a wide range of opportunities for reducing various types of costs and insuring risks. However, economists may see the unmanageable growth of derivatives and the inability to assess their real value as the cause of the financial crisis. Despite this fact, these financial instruments are of great interest to investors, and the number of people trading them continues to grow. If you want to try yourself and your forces, register on the Bitcoke exchange and start earning today.