What is a Perpetual Swap? | Taking a Look at the New OKEX Launch

2018-12-10 16:20

On December 3rd at the Grand Hyatt Hotel in South Korea, Mr. Jay Hao, the CEO of OKEX, announced the upcoming launch of a new product. The new product is a special type of futures contract dubbed perpetual swaps. The product officially launches on December 11th, 2018. The product release affords OKEX an opportunity to capture a valuable new market. It also provides OKEX the chance for a new beginning.

Negative Publicity and New Markets

OKEX has been in the news a lot recently. Unfortunately, the news is never good. Most recently, OKEX future contracts came under fire during the hard fork of Bitcoin Cash. From a public relations perspective, OKEX really needed to clear the air. The large public relations campaign for the launch of perpetual swaps is the Malta-based cryptocurrency exchange’s attempt to put a new foot forward.

Not only does OKEX have a chance to get future contracts right, but also it has a chance to capture some of BitMex’s lucrative futures business. According to the analysts at TokenInsight, most of the transactions on BitMex are boutique futures contracts called perpetual contracts.

What is a Perpetual Swap?

BitMex offers perpetual contracts. OKEX offers perpetual swaps. The difference between the two is essentially marketing. Except for the difference in funding, a perpetual swap is effectively OKEX’s version of BitMex’s perpetual contract.

Perpetual contracts are futures contractswith no expiry or settlement. Futures contracts are essentially bets on the future state of something. These things are typically commodities, like pork bellies. However, on cryptocurrency exchanges like BitMex and OKEX, futures contracts are bets on the future value of a cryptocurrency (like BTC, LTC, BCH, EOS, ETH, and other very liquid cryptocurrencies). Futures contracts are, therefore, derivative financial instruments, or derivatives. Their existence is derived from some other financial instrument.

Settlement

Typically, futures contracts expire and need to go to settlement. At settlement funds are credited or debited from the trader’s account. Perpetual swaps can go to settlement anytime. There is no expiry. Prior to providing the opportunity to enter into perpetual swaps, futures contracts on OKEX would expire within a week, two weeks, or one quarter.

In order to make the bet, the trader needs to make a deposit. That deposit is called the margin. It is typically the collateral for making a much bigger bet. For example, on a 50% margin, the trader can borrow funds from a lender to enter into a futures contract for $100 when they only have $50 to deposit.

Incidentally, $100 is the actual face value of OKEX’s perpetual swap. This means that one of these special, non-expiring futures contracts is redeemable for the BTC equivalent of $100 at that point in time. A swap could also be redeemed in ETC, or any other cryptocurrency eventually allowed by OKEX.

Funding

When the trader borrows funds from a lender for a contract, they are receiving a loan. On OKEX, the loan for the perpetual swap is provided by the OK PiggyBank. The OK PiggyBank is a peer-to-peer lending service.

The OK PiggyBank will lend traders up to 100 times the margin. Traders are not required to take a loan. However, if they do, their contract is leveraged.

Once the contract is leveraged, the trader must pay interest on the amount borrowed. Payment is due every 24 hours on OKEX. This payment is called funding. On BitMex, funding occurs in fixed 8-hour intervals.

Conclusion

Even the Chicago Mercantile Exchange (CME) and the Chicago Board of Exchange (CBOE) allow speculators to trade Bitcoin futures. Futures contracts on Bitcoin are not new. However, OKEX has to improve its service and might even need this new product to survive.

OKEX’s perpetual swaps are competitively priced. Those traders that provide liquidity to the exchange are generally better off going with BitMex. Those that aren’t will enjoy OKEX’s lower fees.

The post What is a Perpetual Swap? | Taking a Look at the New OKEX Launch appeared first on CoinCentral.

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new okex → Результатов: 74


OKEx Launches New Bitcoin Derivative: Cryptocurrency Perpetual Swaps

Malta-based cryptocurrency exchange OKEx launched a cryptocurrency-focused Bitcoin Perpetual Swap product on December 3, 2018, during a press conference attended by CryptoSlate. The virtual derivative product is a peer-to-peer offering that aims to empower traders with the ability to speculate the price direction of digital assets like Bitcoin and Ether to ensure exposure to the risky, yet […] The post OKEx Launches New Bitcoin Derivative: Cryptocurrency Perpetual Swaps appeared first on CryptoSlate.

2018-12-4 14:30


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2018-11-13 00:43


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2018-11-6 12:42


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The second half of 2018 has seen Dollar-pegged cryptocurrencies (stablecoins) flood the market, but recent data suggests that Bitcoin might become the one true stablecoin. The latest report from blockchain research group Diar shows while Tether still accounts for an overwhelming majority of the total stablecoin volume, cryptocurrency traders are actually starting to exchange with Bitcoin directly, rather than use new, regulated alternatives.

2018-10-24 13:51


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Huobi Joins OKEx in Adding Four New Stablecoins

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2018-10-17 21:15


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Криптовалютная биржа OKEx добавила поддержку четырех стейблкоинов: TrueUSD (TUSD), Gemini Dollar (GUSD), USD Coin (USDC) и Paxos Standard Token (PAX). We're excited to announce the 4 new listings of OKEx.

2018-10-16 23:02


Биржа OKEx добавила поддержку четырех стейблкоинов

Третья по объемам торгов биткоин-биржа OKEx сообщила в понедельник, 15 октября, о начале поддержке сразу четырех стейблкоинов: TrueUSD (TUSD), USD Coin (USDC), Gemini Dollar (GUSD) и Paxos Standard Token (PAX).

2018-10-15 13:47


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Binance Follows OKEx In Setting Up Malta Security Token Exchange

Cryptocurrency exchange Binance has signed a deal with the stock exchange of its new home Malta to host traditional assets using blockchain-based security tokens. Malta ‘Taking The Helm’ In a press release September 11, MSX, the fintech and digital asset subsidiary of the Malta Stock Exchange confirmed it had signed a memorandum of understanding (MoU) with Binance to launch the security tokens trading platform.

2018-9-11 20:00


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The Daily: Ledger Adds Coins, Okex Launches Coinall, Exmo Partners with Mistertango

Covered in The Daily on Friday are several announcements crypto users may find interesting. Ledger has added support for 8 new coins and crypto exchange Okex is launching a white label platform. Also, Exmo will offer its European users faster payments and transfers in partnership with Mistertango, and Estonian startup Citowise has integrated credit card […] The post The Daily: Ledger Adds Coins, Okex Launches Coinall, Exmo Partners with Mistertango appeared first on Bitcoin News.

2018-8-10 12:55