OKEx, the world’s 5th largest crypto exchange is all set to launch trading for Tether (USDT) futures on the 14th of November. The exchange will offer a linear futures contract with 10x leverage.
Will a USDT- based Contract Reduce Risks?
The contract will be settled daily and will have pairs with Bitcoin (BTC), EOS, Ether (ETH), Bitcoin Cash (BCH), XRP, Ethereum Classic (ETC), Bitcoin SV (BSV) and Tron (TRX) and Litecoin(LTC). According to OKEx, this stablecoin-based derivatives contracts will be beneficial for traders and will help them navigate the market and take calculated risks with increased efficiency. Furthermore, a USDT- based derivative will reduce the need to switch between crypto-assets.
Lennix Lai, Financial Market Director at OKEx, hinted that the exchange in future may roll put more USD-based stablecoin derivatives to provide the platform users with simplified hedging instruments. He further revealed the reason behind the exchange’s choice to offer linear and not inverse futures contracts for USDT.
“Most of the time, users are not willing to hold altcoins as margin, and they also see inverse contracts itself are complicated to understand. We see this linear contract would be an open door to many new retail traders.”
USDT-Margined Futures Live on OKEx
OKEx, the world’s largest futures cryptocurrency exchange, announced the launch of USDT-Margined Futures. After a successful simulation beginning November 5, 2019, BTC/USDT Futures Contracts officially went live today (November 14) on OKEx futures market.
Served as a virtual derivative product that is quoted and settled in digital token USDT, BTC/USDT contract has a face value of 0.0001 BTC. The available range of the leverage is 0.01–100x.Traders can long or short a position to profit from the increase or decline of a cryptocurrency’s price respectively. OKEx provides a wider derivative portfolio with a greater variety of underlying currencies and more comprehensive functionality to meet users’ trading requirements.
Key features include:
- Leverage Level: 0.01–100x
- Face value: 0.0001 BTC
- Tice Size: 0.1
- Trading Hours: 24/7
- Daily Settlement: 08:00 (UTC)
Advantages of USDT Futures Contracts include:
- Linear Contract — without the need to hedge the margin risk of inverse contracts
- Efficiency and Low-cost — trade without the hassle of switching between cryptocurrencies
- Comparatively Stable — reduce the risks induced by the volatility of the collateral’s price for future contacts and simpler calculations
- Intuitive Trading Experience — similar to spot trading with the addition of leverage, it is easier for users to master the trading system.
“The simulation of our USDT Futures Contract was very successful, and we received positive feedback from traders in the OKEx community,” said Jay Hao, CEO of OKEx. “At OKEx, we’ve developed a safe, reliable, and stable environment for cryptocurrency trading, and strive to offer new services based on our customers’ interests. We’re excited to add USDT linear contract to our Futures market and next on the Perpetual Swap market to meet the interests of our growing international user base.”
Other major cryptocurrencies such as EOS, ETH, LTC, BCH, XRP, ETC, TRX, and BSV on the USDT-margined futures market will be soon launched.
About USDT-margined Futures, please refer to “OKEx Futures with USDT margin Trading User Agreement & Guide”.
Step 1. Login
Login to your OKEx account on www.okex.me. Click on Derivatives → Futures → Futures with USDT Margin.
Step 2. Setup Margin
Click on Margin Mode. Select Fixed or Cross margin mode and adjust your Leverage between 0.01x–100x.
Toggle between BTC or Contracts to select the crypto you wish to use.
Step 3. Open Positions
Click on Open and enter the bid price (you can select BBO, aka Best-Bid Offer, which will execute the order ASAP). Enter the number of contracts you wish to open next to Amount(Cont), then choose between Open Long and Open Short to open your positions.
Step 4. Close Positions
Click on Close and enter the price you wish to close the position (you can select BBO, which executes the order ASAP). Enter the number of contracts you wish to close next to Amount(Cont), then choose between Close Long and Close Short to close your positions.
Step 5. P/L Calculation
To calculate P/L for longing or shorting USDT futures:
- Long USDT futures = (Close price-open price)* number of contracts* face value
- Short USDT futures = (Open price-close price)* number of contracts* face value
Here’s an example of how to calculate P/L:
Suppose we buy long on BTC/USDT trading pair, the opening price starts at 9,600 USDT and the closing price is 9,186.8 USDT, with a total of 1,111 contracts and a face value of 0.0001. The P/L would be:
(9186.8–9600) x 1111 x 0.0001= 45.9USDT
OKEx is a world-leading digital asset exchange headquartered in Malta, offering comprehensive digital assets trading services including token trading, futures trading, perpetual swap trading and index tracker to global traders with blockchain technology. Currently, the exchange offers over 400 token and futures trading pairs enabling users to optimize their strategies.
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