MoonXBT Launches Perpetual Swap with More Operational Simplicity and Risk Manageability
The bearish vibe is slowing down trading activities and many other things in the crypto space, but it is not slowing MoonXBT's progress in launching new trading products.
MoonXBT, the innovative crypto social trading platform has recently launched another derivative trading product – perpetual swap.
Compared to the original perpetual swap that was invented in 2016, MoonXBT's perpetual swap is improved to have more simplicity and less risk.
What is perpetual swap?
Perpetual swap is a kind of derivative similar to a future contract. The major difference of perpetual swap compared to a future contract is that it does not have an expiration date and therefore needs no delivery. This directly brings two advantages.
First of all, a perpetual swap trader can hold a contract much longer and technically faceless liquidation possibility because no delivery will be forced. And a trader can hold the contract long enough to wait for the price to change until he or she turns loss into profit if the trader can manage the margin and leverage properly.
Moreover, perpetual swap can waive a trader from re-establishing long or short positions constantly like what they do when future contracts expire. This will save the traders not only energy but also actual money because losses may occur during moving positions. This is especially welcomed by traders who are frequent derivative traders.
In addition to the above advantages, another major difference between perpetual swap and a future contract is that perpetual swap adopts a funding rate mechanism to make sure the price of perpetual swap is anchored to the spot market price. The funding rate mechanism incentivizes or incentivizes long and short positions by charging them a certain fee in order to achieve the balance of the price.
Traders need to take the funding rate into consideration when calculating their profits or losses. At MoonXBT, the funding rate fee is exchanged between sellers and buyers at the end of every 8-hour interval. When the funding rate is positive, long position holders pay the short position holders and vice versa. Traders will only pay or receive a funding fee if they hold a position at the calculating time of the interval.
Why Choose MoonXBT's Perpetual Swap?
The MoonXBT's perpetual swap is improved based on the original invention to make it simpler to operate positions and manage risks.
The MoonXBT perpetual swap is linear contracts in USDT. All the margins, profits, and losses are calculated in USDT. In this way, traders do not need to allocate their funds into different sub-accounts for different trading pairs, they can open multiple positions with one account and have their profits and losses calculated altogether making it simpler to manage one's account and funds.
In the meantime, when unifying settlements with USDT, traders can balance the risk of their portfolio by using the profit of one contract to make up the losses of another contract to avoid the loss of one single contract causing the liquidation of an account.
Be noted that MoonXBT provides both cross margin and isolated margin mode. Under cross margin mode, the margin is shared between different positions as described above. When needed, one position will draw more margin from other positions to avoid liquidation. In contrast, under isolated margin mode, the margin assigned to a position can not be changed. But this could be also useful to stop loss.
MoonXBT's perpetual swap is one-way meaning a trader can either open a long or short position for one contract instead of holding both long and short positions for one contract at the same time. This simplifies the risk evaluation and decision-making process for traders since they need to only speculate in one way instead of thinking about more complicated hedging strategies. And fast speculation is crucial to deal with fast price fluctuations.
MoonXBT allows users to choose from different tiers of margin and adjust the leverage as freely as they need. The biggest leverage is 100 times. Compared to perpetual swap products on other peer platforms which in reality only offer limited options of leverages, MoonXBT actually wants to protect the traders by allowing them to adjust margin and leverage as they wish.
In terms of trading fees, MoonXBT charges the maker a 0.025% trading fee and the taker a 0.075% trading fee.
It can be seen from the above, that no matter if it's easy to operate, there are various ways to manage risks, or its flexibility to allow traders to optimize their profit and minimize their loss, MoonXBT's perpetual swap is a product that is in the best interest of the traders instead of other parties. Traders can be free of concerns to trade perpetual swaps on the platform with all the provided facilitation. Even if the market is rather quiet now, it is a good time to test the new products on MoonXBT and get familiarized to prepare oneself for the market to come back.