Announced on Monday, December 03, 2018, OKEx will roll a new derivative product on December 11, 2018, at 01:00 (GMT+9). The new derivative product called “Perpetual Swap” will be a new initiative by OKEx to enable its users to speculate the direction of crypto prices.
According to the statement, the launch of perpetual swap counts among the big initiative to make OKEX a crypto platform complete with all suits of financial products. Financial Market Director of OKEx, a digital asset exchange in Malta, Lennix Lai elaborates the launch as,
“This marked a key milestone for OKEx. The launch of perpetual swap demonstrated our continuous commitment to building a complete financial ecosystem on blockchain and crypto. With the new offering, investors and traders can select the products which best fit their trading and hedging strategies. However, we would like to remind our users that due to its highly leveraged nature, implementing risk control strategies are equally crucial in trading.”
Perpetual Swap Perfecting OKEX’s Derivatives Product Suites
Perpetual swap works similar to the Bitcoin Futures. It is a virtual derivative that helps traders to speculate the possible fluctuation of the prices of digital assets. As per the reports, settlement of perpetual swap will occur daily and will have no expiry date. Such daily settlement will allow traders to withdraw their funds every day. On top of it, OKEx facilitate these derivatives with a notional value of USD100-equivalent BTC (equivalent of $100 in BTC). This ration will fasten the daily settlement of swaps as well as the lower its transaction fees. By not restricting the date, Perpetual swap as the future contract will enable buyers to buy assets like bitcoin at which seller agrees to sell.
With the notional value set, users will have two strategies to participate in a swap which the company defined as;
Users can go long a position to profit from the increase of a digital asset’s price, or short a position to profit from the decline of a digital asset’s price, with a leverage of up to 100x.
How Is OKEx’s Crypto Perpetual Swaps Different?
These kinds of Swap was first introduced by BitMex, a cryptoucrrency exchange to ensure miners, traders and speculators bet on the direction of the price of virtual assets. OKEx claimed that its transaction fees are quite low and also offer partial liquidation system which will cut down the impact of the market during forced liquidation. In addition, traders can leverage the risk level using Tiered margin system of OKEx’s derivatives.
As per the announcement released, OKEx stated its perpetual swap includes following features;
• No expiry – positions can be held indefinitely;
• Trade closely to the underlying reference index — unlike futures contract that normally is traded at a different price to spot market
• Leverage level – 1-100x are available
• Track the price of the spot market via a funding mechanism
OKEx still ranks on the second position among top cryptocurrency exchanges with a total market cap $485,057,964 followed by Binance Exchange which stand with $513,504,807 as per the coinmarketcap.
Do you think OKEx will overtake Binance? Will it rank #1 cryptocurrency exchange?