Huobi To Sell Bitcoin Futures Contracts
The Singapore-based exchange Huobi launched a beta version of its new platform for cryptocurrency derivatives. Huobi Derivative Market (Huobi DM) will support trading of bitcoin futures contracts, according to Cointelegraph.
Huobi contracts will allow buying or selling bitcoins at a fixed price at a certain moment in the future. Traders can make profit from fluctuations of digital currency rates, by opening long or short positions at their own discretion. When a bitcoin contract expires, the trader’s position will be closed at the average asset price for the last hour.
The exchange introduces three types of contracts varied by duration: for a week, two weeks and a quarter. A bitcoin contract can be purchased for US dollars with a face value of $100.
In addition, traders will be able to use leverage, that is, to borrow capital to open more profitable positions. Huobi DM offers 1:5, 1:10 and 1:20. This means that if a user chooses the 1:20 leverage, they can open 20 positions having one bitcoin as a margin. As noted in the company's blog, the selected leverage size applies to all contracts and cannot be changed until a trader closes all current positions.
It is reported that Huobi has also developed tools for hedging and risk control. However, the platform is now being tested and is not available to users from the US, Singapore, Israel, and some other countries.