Huobi Futures: Driving DeFi legitimacy

Huobi Futures — an overview

Huobi Futures offers various types of digital currency derivatives. A trader can make a hypothesis on the future price of a token and book profits by opening a long (buy) position or short (sell) position. Futures contracts are denominated and settled in the underlying token, meaning there is no need to hold stablecoins as collateral.

Huobi offers trading in futures contracts for 13 major crypto assets with weekly, bi-weekly and quarterly expiration dates. This allows investors to purchase contracts without having to convert their crypto into USDT.

Since contracts are settled in the underlying assets, traders can hold long positions in futures to make profits on a bull market. As the price of a token increases, so does the value of their collateral; this in turn accumulates the underlying token.

A trader who expects the market to turn bearish can decide to open a short position to profit from an asset that is losing value. Such a trade can also be used as a hedge — if the price of the underlying asset drops, the profits from this position will offset any portfolio losses.

What are perpetual swaps?

Coin-margined and USDT-margined perpetual swaps are derivative products Huobi has been offering to its investors since 27 Mar 2020. These derivative products allow investors to earn profits by leveraging the volatility of token prices.

With perpetual swap contracts, a trader enters a contract to swap one asset for another. This is different from buying and selling on a spot exchange because there is no change in the ownership of the asset being swapped; only the contract to swap is traded.

What are coin-margined swaps?

Coin-margined swaps are opened as long or short positions and are settled in the underlying asset or in USDT. Swaps only have one contract per variety and do not offer weekly, bi-weekly or quarterly settlements. Instead, settlements are made every eight hours, during which realized and unrealized profits and losses will be transferred into the investor’s account balance.

Coin-margined swaps are traded in the underlying assets. For example, purchasing one coin-margined swap contract at $50,000 will cost 0.002 BTC, and realized profits / losses will be deposited back into your account balance in BTC.

What are USDT-margined swaps?

USDT-margined swaps operate under the same concept as coin-margined swaps, but settlements are always made in USDT, not the underlying asset. For example, purchasing one USDT-margined swap for BTC at $50,000 will cost 50 USDT, and realized profits and losses will be settled and deposited back into your account balance in USDT.

What are USDT-margined swaps?

USDT-margined swaps operate under the same concept as coin-margined swaps, but settlements are always made in USDT, not the underlying asset. For example, purchasing one USDT-margined swap for BTC at $50,000 will cost 50 USDT, and realized profits and losses will be settled and deposited back into your account balance in USDT.

Huobi Global is constantly innovating and expanding its range of trading tools and services. These tools enable users to take advantage of different trading strategies to earn profits in both bull and bear markets, and help traders integrate and utilize them as part of their investment journey.

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