Is there a big difference between Bitcoin leverage and contracts?

The main difference between Bitcoin leverage and contracts is: Leverage ratio: The leverage ratio is fixed, and the contract can be customized; Trading mechanism: Leverage entrusted trading, contract OTC or futures exchange trading; Expiration date: Leverage has no expiration date, Contracts have specific expiration dates; risk management: leverage is managed by the platform, and contracts are managed by traders themselves.

The difference between Bitcoin leverage and contracts

Core difference:

bit Coin leverage and contracts are both financial derivatives, but there are essential differences:

1. Leverage ratio:

• Leverage: Provide a fixed leverage ratio, such as 10 Times, 20 times.
• Contract: Traders can customize the leverage ratio with a wider range.

2. Trading mechanism:

• Leverage: entrusted trading, leverage is provided by the platform.
• Contract: Over-the-counter (OTC) or futures exchange trading.

3. Expiration date:

• Leverage: Usually there is no expiry date.
• Contract: has a specific expiration date at which time the position must be closed.

4. Risk Management:

• Leverage: Risks are managed by the platform and traders bear the responsibility.
• Contract: Traders manage their own risks and require a margin as guarantee.

Detailed description:

Leverage:

• Enlarge the trading volume, increase potential profits but at the same time Also increases risk.
• Typically used for short-term trading, as long-term leverage costs can be high.
• Leverage is provided by the platform, and traders do not need to use margin.

Contract:

• Allows traders to trade with leverage and customize the leverage ratio.
• It is divided into two types: perpetual contract and delivery contract.
• Traders need to use margin as a guarantee to prevent losses exceeding the guaranteed amount.
• You can exit the contract by closing the position or holding the position until expiration.

Selection considerations:

Choosing leverage or contracts depends on trading strategy and risk tolerance:

• Short-term trading, high Risk tolerance: Leverage.
• Customized leverage, more complex transactions: contracts.
• Risk management, long-term trading: contracts.

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