Bitcoin hedging
warm tips:
1. According to the notice and announcement issued by the people's Bank of China and other departments, virtual currency is not issued by monetary authorities, does not have monetary attributes such as legal compensation and compulsion, is not a real currency, does not have the same legal status as currency, and cannot and should not be used as currency in the market, Citizens' investment and transaction of virtual currency are not protected by law
2. Before investing, it is recommended that you first understand the risks existing in the project, and clearly understand the investors, investment institutions, chain activity and other information of the project, rather than blindly investing or mistakenly entering the capital market
3. The above explanation is for reference only. Investors should not use such information to replace their independent judgment or make decisions only based on such information, which does not constitute any investment operation
response time: February 5, 2021. Please refer to the official website of Ping An Bank for the latest business changes
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how to use options to hedge the fall risk of spot
for example, the current price of bitcoin is US $10000
if it goes up to US $11000, the spot profit is US $1000
if it goes down to US $9000, the spot loss is US $1000
if you open a put option hedging in bitoffer, the cost is only US $20. If bitcoin goes down from US $10000 to US $9000, the spot loss is US $1000, and the put option profit is US $1000, The two offset each other, your account does not have any loss, this is the charm of hedging
after opening the hedging mechanism, your account will make money if it goes up, and even if it goes down, because the risk has been completely offset.
firstly, the scope of cryptocurrency is the smallest, including digital currency or virtual currency. For example, we can say that bitcoin is a kind of digital currency / virtual currency, but we cannot say that digital currency / virtual currency is a kind of bitcoin
furthermore, only currencies based on blockchain Technology (including cryptography and encryption algorithms) can be called cryptocurrencies. So cryptocurrency is a word specially prepared for bitcoin, Ethereum, and a lot of currencies based on blockchain technology. For example, CT currency and trip currency on the coin exchange platform
2. Legal currency
means that it does not represent the real goods or goods, and the issuer has not fulfilled the obligation to cash the currency in kind; A currency that becomes legal currency only by government decrees. The value of fiat money comes from the owner's belief that money will maintain its purchasing power in the future. Money itself has no intrinsic value, that is to say, when paper money comes into being, legal tender is essentially the paper money that can be circulated according to the law.
Hong Kong Hengtong Antai binary options let you answer, first you need to know what is hedging? Hedging is an investment designed to rece the risk of another investment. This is a way to rece business risk and profit from investment. General hedging is two URLs: http: / / quotes / url related, opposite, equal, break even transactions. Market relevance refers to the relationship between market supply and demand that affects the prices of two kinds of commodities. If the relationship between supply and demand changes, it will affect the prices of the two commodities, and the direction of price change is generally the same. The opposite direction means that two transactions are trading in the opposite direction, so no matter what the direction of price change is, there will always be profits and losses. Of course, to achieve balance of payments, the scale of the two transactions must be determined according to the range of price changes, which is roughly the same. In foreign exchange and options trading, perfect hedging is created by binary options. In fact, the return of perfect hedging is zero. Compared with the traditional foreign exchange transaction, the foreign exchange al option transaction is simpler and more profitable. Similarly, binary option trading can hedge assets such as currency and stocks. Binary option is a new trading method for most domestic investors. Opportunities and risks coexist. Only through continuous learning, can we grasp the opportunity to the greatest extent, avoid trading risks, and become a master of binary option trading
Guangdong Open University
In short, the principle of brick Arbitrage: buy low and sell high, buy money from the place with low price and sell it at the place with high price, that is to earn the price difference of different platforms
but there are three risks in moving bricks:
A. time difference of currency transfer: it takes a certain waiting time to pick up or deposit the currency, so it may miss the best trading time
B. currency price fluctuation: if the currency price fluctuation is relatively large and the process of moving bricks has not been completed, the price difference has disappeared
C. platform problems: some trading platforms may shut down services from time to time, or even run away
principle: carry out brick arbitrage on two platforms at the same time to avoid the risk of "time difference of currency transfer" and "currency price fluctuation"
before moving bricks: the brick moving platform must support the same currency transaction, and the brick moving platforms must be able to transfer currency to each other
Step 1: price difference calculation. There are handling charges for currency trading and currency transfer, so you have to calculate the cost according to your own funds. Only when the price difference reaches how much can it be profitable to move bricks
Step 2: simultaneous operation. Buy BTC on the low price platform and sell BTC on the high price platform. At this time, the number of BTC holdings remains unchanged and the number of usdt increases You need to pay attention to transaction fees.)
Step 3: balance funds. It is difficult to predict which platform has a lower price and which has a higher price e to the price difference. Therefore, the two platforms that move bricks need to prepare usdt and BTC. When the price difference appears, it is convenient to move bricks There are also handling charges for cross platform currency transfer.)
the above is the principle and steps of risk-free arbitrage using BTC and usdt. It also has a big name: quantitative hedging. The fundamental purpose is to earn usdt, not BTC
You can take a closer look at this: Web linksBitoffer pushes BTC option, which is the best risk hedging tool in spot market
how to use options to hedge the fall risk of spot
for example, the current price of bitcoin is $7000. If it goes up to $8000, you can make a profit of $1000 from the spot
but what if it goes down to $6000? You did not do any hedging, spot direct loss of $1000
but if you hedge accordingly and open a put option in bitoffer, the cost will be about US $20. If bitcoin falls from US $7000 to US $6000, the put option will earn US $1000. In this way, the US $1000 of spot loss will be offset, and there will be no loss in the account. This is the charm of hedging
after opening the hedging mechanism, your account will make money if it goes up, and even if it goes down, because the risk has been completely offset< br />
