Dubai, United Arab Emirates Apr 26, 2023 (Issuewire.com) - As a professional crypto derivative exchange, Bitunix offers perpetual swaps trading with up to 125x leverage. In this article, you’ll learn about derivative trading and how to trade perpetual swaps on Bitunix.
The Difference Between Spot Trading and Derivative Trading
To start, you need to understand the difference between spot trading and derivative trading. Spot trading, or crypto-to-crypto trading, is one in which delivery is made instantly after the buying and selling process.
Let's take the BTC-USDT trading pair as an example. During the trade, the trader sells 100 $USDT to get the equivalent value of $BTC. After the transaction is completed, the trader no longer holds $USDT but holds the equivalent value of $BTC worth 100 $USDT. The trader now has direct ownership of $BTC.
Derivative trading is essentially trading in futures contracts on margin and often involves leverage in the process, where the trader only needs to pay a certain percentage of margin to hold a higher-value contract, thereby magnifying returns. However, while using leverage, the greater the gains that may be gained, the greater the losses that may be faced.
For example, when using a 10x leverage to trade BTC-USDT contracts, the trader only needs a margin of 10USDT to hold a BTC position worth 100USDT. When the price of $BTC rises by 5%, the profit that can be achieved by 10x leverage for that position is (100USDT*5%-100USDT)10x=5USDT. Since the trader only used 10 USDT of margin to gain 5 USDT, it becomes a 50% return. But at the same time, if the price of $BTC falls by 5%, the loss is (100*-5%*10x)=-5USDT, meaning the margin of 10USDT brings a return of -50%.
Perpetual Swaps Trading on Bitunix
As a derivative exchange, Bitunix offers USDT-Margined perpetual swaps, which is one of the most popular forms of derivative trading among crypto traders. Perpetual swaps trading on Bitunix exchange allows users to trade with up to 125x leverage, amplifying their earnings if they are willing to.
Step 1 - Go to Bitunix's website and download its official application, or you can download it by searching Bitunix in the App Store or Google Play Store. After installation, click [Login], or [Sign Up] if you don’t have an account yet.
Step 2 - Once logged in, click [Futures] at the bottom of your screen to enter perpetual swaps trading
Step 3 - Click the [Transfer] icon next to your balance to transfer funds from your Spot Account to your USDT-M Futures Account.
Step 4 - You can select the trading pair, margin mode, and leverage on the top left of the screen. Then, enter the price, and amount before you place your order to open long or open short. Once your order is executed, you will be able to see your current position at the bottom of your screen.
Step 5 - Click the [Close] button when you want to close your position and take your profits. You can either decrease your position by entering a certain amount, or close the whole position.
Is Trading Perpetual Swaps on Bitunix Safe?
It's worth mentioning that Bitunix exchange also became a U.S. MSB registrant in late 2022 and received the SEC compliance license in the Philippines in February 2023, and the licences in Seychelles, Estonia, Australia, and other countries are under urgent application. Bitunix crypto exchange allows users to use multi-factor authentication to secure their accounts from any unauthorized access. Bitunix also takes many secure measures on its server and its wallet to ensure users' accounts and funds are safe at different levels. In this way, users can buy and sell their favorite cryptos without worrying too much. As a special product with leverage, the price of cryptocurrency derivatives is affected by a variety of factors, and the price fluctuates greatly. It is difficult for investors to fully grasp the actual operation, and thus there is a possibility of investment mistakes, and if they cannot effectively control the risk, they may suffer large losses, and when users use high leverage, it will bring greater risk to the users themselves. Traders should decide prudently whether to participate in trading this contract and allocate their digital assets reasonably from their own actual situation, such as risk tolerance.
About Bitunix
Founded in November 2021, the professional crypto derivative exchange Bitunix has developed steadily, as it became a U.S. MSB registrant in late 2022 and received the SEC compliance license in the Philippines in February 2023. Then it officially received $10 million in funding to fully open its global market business, with offices established in Dubai. Bitunix is now expanding its team to Latin America, Asia, and Africa, as well as Turkey, Russia, and other regions where the cryptocurrency market is growing rapidly. Bitunix aims to provide a better product experience for millions of users, aiming to become the safest crypto derivatives exchange for users. 2023 will be a year of significant transformation for Bitunix.
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