Bitcoin has reached a new high, but there is no disturbance in the various communities. Many people who did not get in the car began to turn their eyes to the contract market after being upset.
However, in contract trading, currently the more well-known exchanges on the market have two position fund management modes: full position mode and partial position mode. Some of my friends are not clear about these two modes, nor have they figured out what is best for them. This kind of blindly opening a position without understanding the rules is very risky. Let’s take the Huobi USDT standard perpetual contract that everyone often plays as an example, and briefly talk about full position and position swap, so as to better control risks when trading.
What is the full position mode?
The full position mode means that all USDT in the account is used as margin. Users can directly open multiple contracts using this account, and the profit and loss of each contract opened, the occupied margin, the margin rate and other data will also be merged Calculation.
The advantages of this model are:
First, it is easy to operate. One account can be opened for all, not used for repayment.
The second is that the unrealized profit and loss of any other position can be directly used as margin for another contract. For example, my BTC position has made money and ETH position has lost money. Although btc has not closed the position, the unrealized profit and loss can be directly used as margin for additional ETH, which can achieve the purpose of hedging between contracts and reduce the overall margin Requirements to improve the utilization rate of funds.
The third is that all available balances on the account are used as margin. As long as the leverage is moderate, the possibility of liquidation is relatively low. Of course, this shortcoming is also obvious. If the position is liquidated, all funds in the account will be lost.
Therefore, the full position model is still more suitable for institutions or experienced users as hedging and quantitative trading.
What is the warehouse-by-warehouse model?
The warehouse-by-warehouse model is that the account equity of each contract is calculated separately, and the profit and loss do not affect each other.
Margin by position is useful for speculative positions. The assets in this account are your greatest possible loss, which will help you when your short-term speculative trading strategy fails and limit the loss to a certain range. For example, in the case of high volatility and high leverage, although it is easy to be liquidated, the final loss is only the assets under this account and does not affect other account balances.
Therefore, in a turbulent market, everyone wants to open a high leverage, even if the judgment is wrong, the margin may soon be lost. But if you want to effectively control the loss of each open position, you can use the warehouse-by-warehouse model.
So we can briefly summarize the above:
In the use of account funds, the full position mode is that all account funds are used as margin and shared by multiple contract positions. In the case-by-position mode, the margin is calculated separately for each account, and profit and loss do not affect each other. It can be understood that the whole warehouse means all the eggs are placed in one basket, and the warehouse-by-warehouse means the eggs are scattered into multiple baskets.
The risk of liquidation can be understood as: the whole position is “an online grasshopper”. When the margin is insufficient, the basket falls, all the eggs will be broken, and the account amount is completely lost. Warehouse by warehouse is that multiple baskets are independent of each other, and one falling down will not affect the eggs in other baskets.
Currently, on most platforms, you can only choose between a full position or a partial position when trading, but Huobi Contract supports both a wide position and a partial position mode. Whether you are a master or a novice, you can find the one that suits you. Moreover, all varieties under the full warehouse mode support real-time settlement, and the realized profit can be withdrawn at any time, unlike other platforms that need to wait until settlement to withdraw.
From real-time settlement to locked-in collateralized assets, and then to the whole-storage margin model, it can be seen that the reason why Huobi can continuously launch market-recognized contract products is largely due to the attention to user needs and in-depth mining This is the fundamental reason why Huobi Contract can become the world’s largest one-stop derivatives service platform.
At present, it is also during the 2nd anniversary of Huobi Contract. The contract is carrying out the activities of “recharge assets and give VIP” and “VIP of other exchange is our VIP+1”, as long as there is an account equivalent to 30,000 USD and above. Apply for experience VIP rights. Among them, everyone’s favorite U-standard perpetual all VIPs and market makers enjoy a negative Maker fee rate, which is the transaction refund fee. To apply for one, every time you open a position, you still have the opportunity to earn a handling fee.
