Leverage allows cryptocurrency traders unsatisfied with market volatility to make stronger plays on smaller movements. Trading platforms offer various ways to use leverage in order to capture this segment. The latest example is Liquid, an exchange that developed perpetual BTC contracts with up to 100x leverage.
Perpetual BTC Contracts With Massive Leverage
International digital assets trading platform Liquid has announced the closed beta launch of a new crypto offering with up to 100x leverage. Liquid Perpetuals is a derivatives trading instrument that facilitates the trading of perpetual BTC contracts.
Rather than holding the underlying asset, when trading perpetuals on the platform the user is trading contracts based on the price of BTC. A perpetual contract has no expiry date and has no interest fees. Instead, a funding swap occurs between all open perpetual long and short contracts on Liquid.
The BTC contract price on Liquid is based on an index price referencing the real time prices of five cryptocurrency exchanges: Bitstamp, Coinbase, Gemini, Kraken and Liquid. The index price takes the BTC price from these five exchanges, discards the highest and lowest values and then calculates an average between the remaining three.
Besides the high leverage possibility, Liquid Perpetuals has a few other advanced trading features available, according to the developers. These include setting Stop Loss and Take Profit at order entry as well as selecting either Cross Margin or Isolated Margin. Users can also fund their trading with 13 different currencies, both fiat and crypto.
The platform promises to offer deep liquidity for the new instrument as its multi-market order matching engine draws liquidity from Liquid’s Spot, Margin and CFD order books to the perpetuals market. The company also promises clients that they can deposit BTC for trading in less than 10 seconds with zero-block confirmations.
Liquid Perpetuals are further said to introduce an extra degree of trading safety with a smart liquidations feature that carries out liquidations incrementally, 10% at a time. This way traders are not liquidated instantly when the margin threshold is breached. Instead, positions are gradually reduced as margin coverage falls.
International Crypto Exchange Hailing From Japan
Founded in 2014 by Mike Kayamori and Mario Gomez Lozada, Liquid (a subsidy of Quoine) has been a popular Asian exchange for quite some time. For example, the company reported that in the 12-month period up until May 2019, it processed more than $50 billion in transactions.
Liquid was granted an official license from the Japanese Financial Services Agency (FSA), and its parent company Quoine is headquartered in Tokyo. The platform supports several languages including Russian, Korean and Chinese. Last July, the exchange announced that its users can trade bitcoin cash (BCH) against Circle’s USD-pegged coin USDC, coupled with an effort to integrate Liquid into Bitcoin.com’s Bitcoin Cash Register application.
What do you think about Liquid offering clients trading on perpetual crypto contracts with up to 100x leverage? Share your thoughts in the comments section below.
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