Detailed explanation of commonly used futures terms in the currency circle
- WBOYOriginal
- 2024-08-07 17:01:11806browse
Commonly used terms in currency futures include: Contract: an agreement between two parties to agree on the purchase and sale of a specific amount of cryptocurrency at a specific time and price. Underlying asset: Cryptocurrency involved in the contract, such as BTC, ETH. Expiration date: The time when the contract expires, at which time the transaction will be settled at the market price. Leverage: allows traders to borrow funds to expand the size of their trades. Long: A trader who expects an increase in the price of an underlying asset. Short: A trader who expects the price of an underlying asset to fall. Liquidation: When a trader's margin is insufficient to cover losses, a forced liquidation of a trader's position. Forced liquidation: The exchange forces the liquidation of a trader's position, when
Detailed explanation of commonly used futures terms in the currency circle
Futures trading is very popular in the currency circle and involves many professional terms. This article will explain these terms in detail to help you better understand currency futures trading.
1. Contract
A futures contract is an agreement between a buyer and seller to buy or sell a certain amount of cryptocurrency at a specific time and price.
2. Underlying Asset
The underlying asset is the cryptocurrency involved in the futures contract, such as BTC, ETH, etc.
3. Expiration date
The expiration date is the time when the futures contract expires, at which time the contract transaction will be settled at the current market price.
4. Leverage
Leverage allows traders to borrow funds to expand the size of their trades. For example, 5x leverage allows traders to trade with 5x their account balance.
5. Long
A long is a trader who expects the price of the underlying asset to rise. They make profits by buying contracts.
6. Short
A short is a trader who expects the price of the underlying asset to fall. They make profits by selling contracts.
7. Liquidation
If the margin in a trader’s account is insufficient to cover losses, their position will be liquidated. This will result in the forced liquidation of open positions.
8. Forced liquidation
Forced liquidation means that when a trader’s account balance falls below the maintenance margin requirement, the exchange will forcefully liquidate their positions.
9. Margin
Margin is the funds that traders need to deposit when opening a position to ensure that the exchange can make up for losses in the event of a transaction loss.
10. Stop Loss
A stop loss order is a trading strategy used to limit losses. When the price of the underlying asset reaches a certain level, it will automatically execute a stop-loss order, closing the position.
11. Take Profit
Take profit order is a trading strategy used to lock in profits. When the price of the underlying asset reaches a specific level, it will automatically execute a take-profit order, closing the position.
Understanding these terms is crucial for currency futures trading. By mastering these concepts, traders can make smarter decisions and maximize their trading profits.
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