Jump to Part 1.submitted by MoonTrader_io to Moontrader_official [link] [comments]
The March Of Derivatives Through Times And MarketsThe abundance of terms available on the financial market is as scary as it is confusing for the average, uninitiated trader seeking to start making a fortune on their assets. The knowledge of a starting trader who was used to the cozy and familiar confines of the checkout at the local grocery store will turn into a wild rollercoaster ride the moment they step into the crazy world of financial instruments. But the financial devil is not as terrifying as he is made out to be.
Orders, derivatives, contracts, futures, shorts, stops and so on are the terms that threaten starting traders to to shatter dreams and haunt their nightmares, drenching their backs with cold sweat at the sight of ominous Japanese Candles and convoluted geometrical figures on frightening charts. But it is not that horrifying as the theory of virtually every single financial instrument is tightly knit into the fabric of everyday life. The simplest and most common instrument that every single person who has ever watched even a moment of financial news has heard of is the basic derivative.
The derivative is just a fancy name for a contract relying its value on a large variety of instruments on the financial market that are better known as stocks, bonds, commodities, currencies, interest rates and other variables. In fact, there are derivatives on virtually anything imaginable and a very simple example can be betting, where the profit of one party to the contract is placed on the outcome of a certain event.
The Long WayThe history of derivative contracts goes back to ancient times. The instrument has come a long way since its primitive form as a verbal agreement between merchants seeking to attract funding for their adventures. One of the oldest known examples is that of Babylonian merchants who concluded risk sharing agreements and received loans for their caravans. The loans could be repaid if the goods were successfully delivered and sold in distant lands. The Templars used a further development of loans as they used to give money to pilgrims traveling to the Holy Land and would later charge interest on the funds. The Conquistadors were no better, as they signed futures contracts with the Spanish Crown and wealthy Spaniards for their ventures into the New World, where the booty and plunder pilfered from the hapless natives would serve as the payoff. The first modern derivative contracts appeared on the London Stock Exchange in the 1830s, and the United States entered them into practice in the 1850s.
Derivatives, mostly the swaps, served as the reason for the 2008 mortgage crisis in the United States as the involvement of counterparty risks simply spiraled out of control.
In the cryptocurrency world, the first derivatives were issued on BTC as Bitcoin futures and options are successfully traded on the Chicago Mercantile Exchange (CME Group), the Chicago Board Options Exchange (CBOE), as well as on a number of cryptocurrency exchanges, in particular, on Binance, BitMex, BitFinex, OKCoin and others.
Types of DerivativesThere are a number of types of derivatives that are available to traders. Most of them operate on the same principles with several differences that are tailored to specific requirements the traders put forward.
Futures contracts are some of the most common types of derivatives. A futures contract is an agreement between two parties for the purchase and delivery of some kind of asset at an agreed upon price at some date specified in the future. Futures are traded on exchanges as standardized forms. This type of derivative is usually used by traders to hedge risks or for speculation on prices of various assets. A classic example are speculations on the price of oil, gold or the price of the US dollar or British pound.
The expiration date of the delivery of the asset is not always the date of contract termination, since many derivatives are settled on cash. Basically, the gain or loss in trade is a positive or negative cash flow for the trader. Interest rate futures, stock index futures, and many more are also called cash settled contracts.
Forward are the next important kind of derivative and are quite similar to futures, much like most other derivatives. Forward contracts are not traded on exchanges, but on OTC. Under a forward contract, the buyer and seller can customize the terms of the deal, its volume and the settlement process. Counterparty risks, or the risk that one of the parties will not be able to fulfill their obligations are inherent to futures. An important aspect of forwards is that more than two parties can be involved in the contract to offset the risks.
Swaps are a derivative under which it is possible to swap one kind of cash flow with another. For example, it is possible to switch from a variable interest rate loan to a fixed interest rate loan, or vice versa. These are very popular for offsetting risks and are extremely useful when dealing with currencies.
Options are agreements between two parties to buy or sell an asset at a predetermined future date for a specified price. Under this type of derivative, the buyer is not obligated to call the contract, while the seller has to either buy or sell the asset if the buyer chooses to exercise the contract. Hence the name. Options are commonly used for hedging or price speculation on assets.
The Echoes On DerivativesThe opinions of market specialists on derivatives vary diametrically as many herald them as the be-all of the market, while others blame them for excessive volatility and other market troubles. Derivatives do have their limitations as they are quite difficult to value. Since the price of derivatives is based on the price of assets, their value is subject to a variety of external factors. The risks for OTC derivatives include counterparty risks that are difficult to predict. The expiration time, the cost of holding the asset, and the interest rates are also factors that affect the value of derivatives. Matching the value of a derivative with the underlying asset is made difficult by this combination of factors. The supply and demand of a derivative can make its value to rise and fall in value even if all other factors, including the price of the asset are kept constant. And this is called speculation.
The most recent criticism was directed at Bitcoin futures, which have caused the value of Bitcoin to jump, but eventually failed to maintain its price in the plus in the long run. The call from every set of lips on the market was that Bitcoin was a bubble and its end was nigh. The failure of Bitcoin futures contracts to have any serious long term effect on the asset’s price can be attributed to the immense news background determining the price of such an asset, once again proving the limitations of derivatives on classical exchanges and their amalgamations on the crypto market.
Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia said “It is rare that you see something more volatile than Bitcoin, but we found it: Bitcoin futures.”
Since Bitcoin does not have any physical underlying assets, many experts on the market believe that the advent of futures contracts for Bitcoin is not good for the crypto market in the long run. The arrival of institutional investors is supposed to be the panacea the market is waiting for. The lack of any requirements on the ownership of Bitcoins on the part of the seller of the futures contract is considered to be the main drawback hampering the application of derivatives for such assets.
Those siding with the futures on Bitcoin claim that their arrival will help stabilize the market and provide better order execution, thus bringing a more civilized nature of trade to the entire market. Another important argument in favor of derivatives with crypto assets is the trust factor. Crypto enthusiasts are certain that the introduction of such instruments on regulated and reputable exchanges will help garner trust from institutional investors and attract them to the market of crypto assets, thus generating liquidity and minimizing volatility.
The MoonTrader ApproachTrading is an art form, but there are plenty of techniques and ways of streamlining and smoothing out the learning curve necessary to becoming a true maître. MoonTrader will offer an abundance of instruments necessary for beginning traders to start making sense of the market and earning on their assets.
The world of finance and trading is not that scary if properly explained. In fact, most of the realities found in the world of trading are situations we encounter in daily life and have gotten used to. The situations simply acquire different titles and applications in the world of trading.
MoonTrader intends to offer its users a wide variety of instruments so they can start trading freely and safely on the market, and is determined to attract new participants by simplifying and minimizing the risks the trade of crypto derivatives can pose.
Jump to Part 1.
Check us out at https://moontrader.io
Check us out on:
Originally posted on our blog.
Home » Journal » BTC price analysis: Wild ride goes on, 3 year old support breached. Journal. BTC price analysis: Wild ride goes on, 3 year old support breached . Rene Peters November 25, 2018 0. September has been a wild ride for bitcoin owners: the digital currency began the month nudging an all-time high of $5,000 before losing nearly 40% of its value in a spectacular crash. Bitcoin did ... The Bitcoin market has been going crazy today in anticipation for the upcoming exchange traded fund (ETF) decision expected to be announced at any moment. During the early morning hours of February 10, the price per bitcoin hit an all-time high of US$1350. Following the brief spike the price has been volatile and dipped to ... This is a guest post by Mary Ann Callahan, a journalist at UK-based cryptocurrency exchange Cex.io, in which she shares her insight into possible reasons for such a wild Bitcoin price' fluctuation. Price action and some technical indicators all show similar patterns to when bitcoin hit its bottom in 2015, before the 2016-2017 bull run. Like today, the price crashed down to the 200-week moving average, where it bounced around for a few days, crashed even lower for a day, popped back up, and then danced around the line for a few weeks. Bitcoin has never gone lower since then. Bitcoin Ethereum Ripple Bitcoin Cash Chainlink Binance Coin Litecoin Cardano Bitcoin SV EOS Monero Tron Crypto.com Coin Stellar Lumens Tezos UNUS SED LEO NEO Cosmos NEM Iota Dash VeChain THETA Ethereum Classic ZCash Maker HedgeTrade Waves Ontology Dogecoin FTX Token Basic Attention Token BitTorrent Algorand DigiByte 0x Ren Zilliqa Icon Qtum ... Here’s Who Controls Where the Bitcoin Price Goes From Here. June 14, 2018 8:19 pm by Kyle Torpey. 1,103 Investors read this. The bitcoin price has been on a wild ride ever since the first coins were made available for trade. Although the price has seen its fair share of ups and downs over the years, the long-term trend has been upward — at least up to this point. But what has caused this ... BNB/USDT Binance price chart in real-time. Stats on multiple timeframes, order book, news and trollbox. Coinalyze. Futures Data. Individual Charts; Global Charts; Technical Analysis. Bitcoin Ethereum Ripple Bitcoin Cash Chainlink Binance Coin Litecoin Bitcoin SV Cardano EOS Monero Tron Crypto.com Coin Stellar Lumens Tezos UNUS SED LEO NEO Cosmos NEM Iota Dash VeChain Ethereum Classic THETA ... Insights From Within The Wild Ride Of Investing In Digital Assets. I’ve kept quiet with my head down over the past couple of years through the ups and downs (mostly downs….for now) of the ... While July began with slow and dull price movements, Bitcoin has taken August for a wild ride in the first two days. As reported yesterday, BTC registered a new yearly high of over ,700.The bullish trend continued, and just a few hours ago, Bitcoin reached yet a fresh 2020 high when the asset topped at about ,100 on most exchanges. However, what followed was a massive rejection, Now, Bitcoin is hovering around $9,200. If this impressive increase of 3,300% is to occur again in the same timeframe, BTC will be on a wild ride to almost $318,500 by October 2021. Bitcoin Price Performance. Source: Twitter “‘Price doesn’t repeat, but it does rhyme.’ – This famous saying is very relevant to this chart. I don’t ...
[index]          
Today we saw Bitcoin briefly climb over $8,000 before falling lower again. It remains just under this level. Last week we saw it hit its highest level so far this year climbing past $8,300 on ... BITCOIN WILD RALLY 2020!! 🔴 MAJOR FLAG - Programmer explains Ivan on Tech. Loading... Unsubscribe from Ivan on Tech? Cancel Unsubscribe. Working... Subscribe Subscribed Unsubscribe 228K ... Bitcoin Technical Analysis & Bitcoin News Today: Bitcoin is breaking above $10,000. Also, the altcoins are popping in this altcoin season. I'll use technical analysis on the Bitcoin price to make ... BITCOIN and ALTCOINS GOING WILD!!! 🔴 Undervalued Alts Today - Programmer explains Ivan on Tech. Loading... Unsubscribe from Ivan on Tech? Cancel Unsubscribe. Working... Subscribe Subscribed ... Wild Bitcoin Price Swings, ETC Futures, Lumens Futures, Gemini Insurance & Bitcoin Puzzle The Modern Investor. Loading... Unsubscribe from The Modern Investor? Cancel Unsubscribe. Working ... wild ride ahead! eth attacked! my btc buy signal! life changing money starts soon! ripple dev quits! cryptorevolution ...