Analysis On The Advantages Of Biking Exchange Contract Trading

KingData ·2022-06-22

一.The completeness of the test

1.1 What is measure completeness?

Complete measurement: that is, the platform pricing, margin, settlement and other systems all use a unified measurement unit. By riveting USDT stable currency and fiat currency, Biking Exchange ensures that cryptocurrency pricing, margin and settlement are all calculated in USDT. At present, most trading institutions in the market use a calculation method with incomplete measurement, that is, pricing is in fiat currency, but margin and settlement are in BTC or the underlying currency. 

1.2 Why must the Biking digital asset derivatives trading platform be fully measured? What are the consequences of incomplete measurement? 

1.2.1 Unable to calculate profit and loss intuitively 

When a user trades on a platform with incomplete measurement, it is impossible to intuitively calculate the profit of the calculation contract. For example, when the BTC spot index is 6000, the user buys a BTC call contract with 10 BTC plus 10 times leverage: 

When the BTC spot index rises by 5%, that is, it rises to 6300, logically speaking, it should make a profit of 50% at this moment, that is, earn 5 bitcoins, but if the platform calculates according to the spot price, a BTC contract will rise by 300 at this time. , a total of 10 contracts + 10 times leverage. At this time, the number of bitcoins earned by the user is: (300x10x10)/6300≈4.76. 

When the BTC spot index drops by 5%, that is, when it falls to 5700, it is reasonable to say that at this moment, the account loses 50%, that is, a loss of 5 bitcoins, but the platform calculates according to the spot price. At this time, a BTC contract drops by 300, a total of 10 contracts + 10 times leverage, the number of bitcoins lost by the user at this time is: (300x10x10)/5700≈5.26. 

In addition, because the account margin is also Bitcoin, when the spot index falls, not only will it bear more contract losses, but the margin will also shrink simultaneously, because, in the case of incomplete measurement, the fall will accelerate the user's liquidation, and what is more fatal is that , you simply can't figure out when you're going to blow out.

1.2.2 Completely unfavorable for risk control

On a platform without complete measurement, when users make money, they cannot get the amount they deserve. When they lose money, they not only lose more, but also accelerate the process of liquidation, which makes it difficult for the platform to do well. Risk control of the margin system. 

During the fall of the BTC spot index, the number of losses has increased, and the margin account has also shrunk. For the platform, when is the warning? When will it be forced? There is no good standard to calculate, and it is even more difficult to reduce the probability of user's liquidation and the probability of passing through. 

1.2.3 Unable to create more derivative instruments 

Due to the incomplete measurement, it is difficult to do a good job in risk control, which will lead to some derivatives with high requirements for risk control, which cannot be traded on the platform. Such as: European options, American options, Asian options, binary options, binary volatility options, etc. An important prerequisite for these options to be designed and launched is: complete measurement. 

Strictly speaking, this calculation method with inconsistent pricing and settlement units can be called inverse futures in terms of traditional classification, and in the traditional financial world, no institution or individual will trade inverse futures. 

Therefore, in order to better protect user assets, reduce the probability of users' liquidation and exposure, and to provide more derivatives tools in the future, the primary goal of Biking Exchange is to achieve complete measurement. 

二. STAMP, the strongest risk control mechanism

The STAMP cross-margin risk control system uses a margin account for the user's investment portfolio, that is, regardless of the purchased futures, options or other derivative products, they share a set of margin system, and set a T1 forced liquidation warning line for the overall account, and T2 To liquidate the execution line, for example: 

At this time, the user has three derivative contract products ABC with different loss situations (assume the loss situation is: A

However, in the same situation, according to the STAMP cross-position margin risk control system, the system will first calculate how many positions need to be closed to make the overall account margin reach the T1 forced liquidation warning line, which may be 1/3 of the C contract, or it may be It is contract C + 1/2 of contract B. The order of liquidation starts from contract C with the largest loss. As long as it reaches above the T1 warning line, the liquidation will stop. 

The STAMP system will adjust the margin demand rate of each user in real time according to the margin usage rate of each user's investment portfolio, market conditions and the user's investment position level in real time, and adjust the leverage ratio of each contract in real time. The only purpose is Just to prevent users from blowing up their positions! 

It is precisely because of this advantage that Biking Exchange can greatly reduce the risk of users' liquidation of positions, and at the same time reduce the probability of over-positioning to an extremely low level, so even in the event of over-positioning, Biking Exchange will not. Any user will be required to share the loss of the position, and the platform will take the lead in using the reserve fund and platform profits to make up for the loss of the position. 

Another advantage that this big advantage brings to users is that on Biking Exchange, users can withdraw profits at any stage before the contract is delivered, even when the position is not closed. 

三. Classic contract futures 

The unreasonable product mechanism and wanton manipulation of the digital asset derivatives trading platform have been criticized for a long time, but even so, a large number of investors still pour into the digital asset derivatives trading platform for contract transactions. 

As an upgraded version of the spot trading platform, the professional digital asset derivatives trading platform obviously needs a more professional financial quantitative team background and more reasonable derivatives tools. As a next-generation digital asset derivatives trading platform, the classic futures contracts launched on Biking Exchange have received high attention and recognition from contract trading professionals and investors.

3.1 Perfectly meet investors' hedging needs with the lowest handling fee 

The classic futures contract of Biking Exchange is a contract that must be settled at a certain time. The biggest difference between the classic futures contract of Biking Exchange and the perpetual contract in the market is that the classic futures contract has a clear delivery date. In the perpetual contract, as long as the position you opened is not liquidated, it will never be closed passively. As long as your pending order is not actively withdrawn, it will be kept forever until a transaction is reached. In layman's terms, it is a futures contract that can be traded forever. 

Because the classic futures contract has a delivery date, the closer to the delivery date, the futures price should converge to the spot price and eventually remain consistent. The perpetual contract has no intrinsic value without a delivery date, so its futures price can deviate far from the spot price. Once the futures price is unconstrained, it becomes a pure gambling tool. 

Although the perpetual contract model solves the possible price manipulation near or just after the delivery to a certain extent. But the bigger question is, how to ensure the same spread between the futures price and the spot price? 

The perpetual contract in the market introduces a capital cost to anchor the spot price, that is, when the perpetual contract price and the spot price deviate from the reasonable spread at a certain moment, the capital cost will force the deviation back to the reasonable spread! 

What is the specific operation? That is, when the futures price is greater than and significantly deviates from the spot price, the bulls need to pay the bears. At a certain moment, when the futures price is less than and significantly deviates from the spot price, the bears need to pay the bulls. The bigger the deviation, the higher the rate! 

Funding rates are settled every 8 hours for perpetual contracts. Users with positions at the funding rate timestamp either close the position or get the rate. The launch of perpetual contracts is to solve the tedious workload of closing positions and reducing positions during delivery and reduce the handling fee. However, perpetual contracts have a funding rate that is settled once every 8 hours. It is a cost that cannot be ignored. 

The classic futures launched by the Biking exchange do not have any additional transaction costs except transaction fees. It avoids reducing profits or increasing losses due to funding rates during the contract process. The classic contract on the Biking exchange makes trading more pure and does not pay for other additional factors. 

In addition, the perpetual contract settlement funding rate not only increases the extra cost, but also has an obvious arbitrage space. You can close the position at any time within 8 hours of the funding rate settlement. If the buying direction is opposite, you only need to close the position before the funding rate timestamp. If the direction is the same, you only need to buy immediately after the funding rate timestamp. In theory, it is possible to avoid paying interest or even eat more interest. 

At present, the objective factor that arbitrage does not occur on a large scale is the handling fee. The arbitrage part may not be able to offset the handling fee of the arbitrage operation. However, if an institution can obtain a relatively low handling fee, the probability of this arbitrage occurrence will increase. 

The classic futures trading on Biking Exchange avoids unreasonable arbitrage by speculators and is the most suitable way to hedge. The hedging of the classic futures contracts on Biking Exchange within a specific period will not increase additional transaction costs, but also achieve the purpose of hedging.

3.2 Delivery at maturity, avoiding the pseudo-concept of perpetuity 

Biking classic futures contracts abandon the pseudo-concept of perpetuity in the market and focus on futures themselves, aiming to provide futures traders with truly professional classic futures contracts.

In actual trading, futures and spot prices are actually two similar but different curves. By monitoring spot and futures prices, it can be found that the price curves of futures and spot are intertwined, so you only need to open a position when there is a price difference, then close the position when the price is equal to make a profit, and then wait until the price difference occurs again. , continuous circulation, no need to wait until delivery to close the position, which can greatly increase the trading frequency, thereby improving the overall rate of return. 

To achieve such high-frequency operations, perpetual contracts are naturally not required. While increasing your own rate of return, you have to pay interest to the counterparty, which invisibly increases transaction costs. 

Futures are more stimulating to spot, and this stimulation comes from the rapid changes in the futures market. The probability of a futures manipulator owning a contract for a long period of time is very small, in which case a perpetual contract makes no sense.

The classic futures contracts on Biking Exchange do not charge additional fees for delivery at maturity, and perfectly meet the hedging needs of investors with the lowest handling fees. Professional futures contract types are selected to meet professional hedging needs. 

四. Rich contract derivatives 

In addition to the above three points, Biking Exchange will also provide users with a wealth of contract derivatives trading services. Its main features and advantages are as follows: 

4.1 Perpetual Contract 

The perpetual contract sector of Biking Exchange has strong anti-volatility ability and market depth superior to similar platforms. Moreover, the perpetual contract sector does not have a delivery and settlement date, but anchors the index price with the funding rate. It is the biggest guarantee of the anti-fluctuation ability of the contract plate. On the other hand, in perpetual contract transactions, users can hold positions indefinitely as long as they have sufficient margin. 

About the handling fee: 0.04% handling fee will be charged for each perpetual contract opening and closing position, and the funding rate will be charged every 8 hours, with the upper limit of the funding rate being 0.15% (the overnight fee of the express contract is 0.02% and calculated at 4:00 am the next day, and the position is closed. collected later). 

4.2 Express Contract

Express Contract is a new type of blockchain contract derivative that Biking Exchange brings to users. It combines the advantages of a variety of traditional financial derivatives and uses the comprehensive value of the three major exchanges to ensure the stability of the K-line value and to open positions at the same time. & Zero slippage for closing positions. The opening and closing of quick contracts will use the spread mode, with a fixed spread of 30,000 yuan, and one-click transaction, which is very smooth. 

The main features of the Express Contract are as follows: open positions at market prices, 100% fast transactions, and stable position opening even in extreme market conditions, which will make users’ losses clearly and controllable. In addition, there is no fee for opening positions in Express Contracts, which means that users can open positions at zero cost, and Biking only charges 0.075% of the handling fee when closing positions. 

The above two contract products are equipped with take profit/stop loss percentage display, which enables customers to monitor the profit and loss of the order more clearly. In addition, through the two modes of cross-position mode and isolated position, the already opened orders can also be partially closed and opened in reverse. In addition, contract orders can also be personalized, and users can freely adjust the leverage of 1-100 times and freely switch the margin. 

五. Fund security guarantee

It is the responsibility of the exchange to provide users with an effective capital security guarantee, which is also the most important section of the Biking exchange. On the platform of the Biking exchange, multiple offline signatures are completed for all capital dynamics, ensuring microsecond-level judgment and realizing The deep cold storage of assets provides 100% bank-level security risk control for each user. 

In terms of currency withdrawal, Biking Exchange will quickly review and withdraw funds within 1-3 minutes (the specific arrival time is subject to the chain), and the OTC service section is subject to the completion of the merchant's sale.

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