Malta-based cryptocurrency exchange OKEx has launched a new bitcoin derivative instrument called a “perpetual swap.” The newly presented product has no expiration date, which means that positions can be held for an indefinite time. It allows traders to enter a new format in BTC/USD trading. In fact, this is a margin trade instrument which is aimed at easing the traders' lives, i.e., traders no longer have to re-open their positions; more than that, there will be no commission for new contract creation, in this case.
Such an approach makes the perpetual swap an excellent instrument for a long-term investment or a way to hedge risks. The representatives of the crypto exchange put it the same way in their statement: the traders can either long a position to gain from increases in bitcoin’s price or short a position to profit from the decline.
The same statement contains information about a notional value of $100 equivalent in BTC for one swap contract. Also, the new product offers up to 100 times leverage. In comparison with the traditional markets, this is a much higher number. OKEx claims it can reduce the trading cost. The new instrument also offers a “tiered maintenance margin ratio” feature — traders with open positions can adjust their leverage according to their risks and market conditions. There is also a “mark price” mechanism which helps traders to exclude the high volatility liquidations. The settlement time is at 04:00 and 16:00 UTC daily.
The representatives of OKEx also stated their plans to add new swap instruments for other cryptocurrencies.
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