What is crypto contract?
◆ Bex500 offers BTC perpetual contracts and 40+ other types of contracts.
Take perpetual contracts as an example, they include 4 trading pairs: BTC/USDT, ETH/USDT, XRP/USDT, LTC/USDT
◆ Trading in Bex500 is actually trading crypto contracts, when you trade BTC/USDT, it has the same effect of trading Bitcoin. Because, 1 BTC/USDT contract is worth 1BTC.
What is trading crypto contracts?
◆ Unlike other exchange where you can only start trading by “buying” bitcoin, Bex500 allows you to start trading with selling. It is used when you predict that bitcoin’s price will decline.
◆ When you buy 1BTC/USDT contract, you are actually buying BTC and selling USDT, like in this example:
◆When you sell 1BTC/USDT contract, you are actually selling BTC and buying USDT, like this:
◆ The action of “buying” or “selling” in the first step is called “opening a position”.
The opposite action of “selling” or “buying” is called “closing a position”, these are the terms we will introduce in Glossary of trading items
What is crypto margin trading?
◆ Margin trading is the ability for you to enter into positions (either buy or sell) larger than your account balance. With a little bit of cash, you can open a much bigger trade in the crypto market.
◆ In the case above, when you buy 1 BTC/USDT, you don’t have to pay 1 btc worth of USDT, instead you are required to pay only 1% of it. If the current price is $8,000, only $80 is required.
◆ Margin trading enable you to profit in both bull and bear markets, amplify your profits up to 100x, and to hedge against the risk of the bitcoin price going down.