Huobi DM (Futures Trading) Platform Now Offers Perpetual Swaps
Huobi Group subsidiary Huobi DM announced the launch of perpetual swaps, which has been live since March 31st. With this newest addition to their digital asset array, the scope of Huobi as a leading financial service provider once again increases.
Huobi Group was founded in 2013, by computer engineer and Tsinghua University alumnus, Leon Li. Huobi Group received seed funding from Chinese real estate tycoon Dai Zhikang, ZhenFund, and Sequoia Capital. Huobi Groups’ cumulative turnover exceeds well over $1 Trillion. In 2017, after a complete cryptocurrency ban in China, Huobi relocated to financial hub Singapore, where it now has its HQ, other offices are located in Hong Kong, the United States, Japan, and Korea. Some of its successful subsidiaries include Huobi Global, Huobi OTC, Huobi Capital, Huobi Korea, Huobi Chain, Huobi Cloud, as well as derivatives platform Huobi DM.
Back in 2018, Huobi launched cryptocurrency derivatives platform Huobi DM (Huobi Futures) as one of the first digital asset service providers offering cryptocurrency derivatives products. On the platform, users can trade futures, with weekly, bi-weekly and quarterly contract settlements. There are futures contracts for BTC, ETH, EOS, LTC, XRP, BCH, BSV, TRX, and ETC. Huobi DM has protection mechanisms in place to execute in times of need. For instance, there is a liquidation circuit breaker, which prevents a massive liquidation domino effect only for leveraged positions. Other features include sub-accounts and maker only order types.
Huobi made an easy to follow tutorial on how to use Huobi DM. Every step shows a picture of what to do. All the trading options are explained in this manual. If you already have a Huobi Global account, you can log in to Huobi DM using your Global username and password.
During the month of January 2019, the cumulative trading volume of Huobi Derivative Market reached $20 Billion. Huobi DM has been successfully rolled-out, with no clawbacks so far, since its inception.
What are derivatives contracts?
A derivative contract is a contract with a value that is based on something else (its value is derived from another asset). The value is based on the underlying asset.
People mainly use derivatives for two purposes, namely to hedge risk or as a form of speculation. The main difference between the two is that one is used to limit risk by using derivatives as price insurance (hedging) while the other is driven by the opportunity for profit (arbitrage).
Derivatives have 4 main types:
A forward is a non-contract between two parties to buy or sell an asset at a specific date and time for an already determined price. This type of derivative contract is particularly useful for hedging.
A futures contract is similar to the forwards, except for the fact that futures are standardized (not customizable like forwards) and they are regulated. In essence, you predict the price of the asset going up or down in the future and you speculate by buying or selling futures contracts based on that. Futures contracts can be traded on a futures exchange. Futures are available for cryptocurrency as well as for traditional assets.
An options contract gives you the right but not the obligation to buy or sell a security or another financial asset. Mostly used in securities, commodities and real estate.
A swap is a derivative product. When you trade swaps, you are in an agreement with another party to exchange sequences of cash flows for a certain period of time. One of the two cash flows has a fixed value, while the other fluctuates based on an index price, interest rate or currency exchange rate.
Huobi DM Perpetual Swaps
As of March 31st, Huobi DM offers users the ability to trade Perpetual Swaps on the platform. Huobi perpetual swaps have three main features, there is no delivery date, the settlements are three times a day (4:00, 12:00, 20:00 GMT+8), flexible settlements ranging from 1x until 125x, and inverse perpetual swap contracts.
Huobi Perpetual Swaps are traded on a reliable, secure and stable platform, where there are various risk control measures in place, low trading fees , a Perpetual swap VIP sharing program, a special policy for VIP clients, a maker program as well as user-friendly service.
You can use your Huobi Global account information to log in to Huobi DM. After logging in, you need to accept the terms for trading Perpetual Swaps. After rebalancing funds between your trading account and into the swap account, you are ready to start with a swap.
If you would like to hear more about Huobi Perpetual Swaps, I suggest watching the video below, of Huobi VP Ciara Sun, in which she explains more about Huobi’s latest product launch.
Official media channels
In any case, that you are unsure if a website is officially linked to Huobi, you can use Huobi’s official media authenticator: https://www.huobi.com/en-us/verification/
Huobi Group has a long-standing reputation for being an innovator in the financial service industry. After years of seeing headlines of exchange hacks losing millions of dollars in users’ funds, Huobi has always maintained its reputation of being a hack-free digital asset exchange. Huobi has a user's first mentality, with a multi-million dollar user protection fund, just in case something goes wrong.
As a trader, I feel safe using the trading platform. However, trading derivative products, like perpetual swaps, are not for the inexperienced. When you start using Huobi DM, make sure to start with small amounts, make sure you know the ins-and-outs of the platform and never ever deposit more money than you are prepared to lose, because a liquidation can be just around the corner.
Disclaimer: This article is not intended as investment advice. This article reflects my personal opinion on Huobi DM. You should always do your own research #DYOR before investing in assets that are accessible in an unregulated market. Never invest more than you are willing and able to lose.
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