Callable Bull/Bear Contract Simulated Trading Launched: Trade To Win Free Gate.io Points
As part of our effort to cater to user demand, Gate.io has launched Callable Bull/Bear Contract (CBBC) simulated trading. The CBBC is a leveraged investment product, simple to trade, with a lower fee.
The Callable Bull/Bear Contract (CBBC) is a leveraged derivative financial product. If you are bullish on the prospect of the underlying asset, purchase a callable bull contract; if you are bearish on the prospect of the underlying asset, purchase a callable bear contract. The CBBC is traded like you are trading an asset in the spot market. As it is leveraged, investors can amplify their gains as well as their losses.
Now you can try out the CBBC, risk-free at your demo account:
By participating in the simulated trading, you can claim a reward of $5 worth of Gate.io Points.
November 13th 12:00 AM-November 20th 12:00 AM UTC
During the campaign period, any user who has made at least 1 CBBC purchase or buy in a simulated trading account, he/she can claim $5 worth of Gate.io Points.
1) Conducting any CBBC simulated trading is deemed as participating in the activity.
2) The activity is only for verified users.
3) The rewarded Gate.io Points will be valid for 1 year, starting from the date they are credited.
4) The CBBC simulated trading uses fake assets, which doesn’t incur any real risks.
5) Cryptocurrency markets are volatile and susceptible to impact from regulation, market and other factors. Please pay attention to the risks involved when you are trading with your real asset later.
About Callable Bull/Bear Contract (CBBC)
The CBBC has two types of contracts, a callable bull contract, and a callable bear contract. If an investor anticipates an upward movement of the underlying asset, he/she can purchase a callable bull contract; if an investor anticipates a downward movement of the underlying asset, he/she can purchase a callable bear contract. Without considering other factors, if the underlying asset’s price rises, the bull contract will generally rise in value while the bear contract decrease in value; if the underlying asset’s price decreases, the bear contract will generally rise in value while the bull contract decrease in value. The strike price, call level and expiry date are fixed upon the issuing of a CBBC. When the underlying asset’s spot price hits the call level, the CBBC will be called and trading will be terminated immediately.
The CBBC is essentially a special kind of option. For a callable bull contract, the intrinsic value is the underlying asset’s spot price minus the strike price; for a callable bear contract, the intrinsic value is the strike price minus underlying asset’s spot price. At Gate.io, the CBBC expiration date uses Hong Kong Time. When a CBBC expires, it will be settled. The settlement is the difference between underlying asset price and the strike price, divided by the entitlement. The maximum loss is limited to the investor’s entire investment capital.
The characteristics of the CBBC:
1） Easy to trade. You can simply buy and sell a CBBC like you are buying or selling an asset in the spot market.
2） Highly leveraged: The CBBC leverage can be as high as 100x or 200X, in certain cases.
3） Lower trading fee: The CBBC trading fee is lower compared to a perpetual contract as it is charged based on the investment capital, irrespective of the leverage.
4） Callback: The CBBC can be called back. When it is called, the investor only receives a residual value if there is any. To calculate the residual value, the lowest price observed during an observation period, instead of the call level, is used.
The CBBC VS Leveraged ETF
1) The CBBC, in general, has higher leverage;
2) The CBBC does not incur any management fee.
3) The CBBC doesn’t have a re-balancing mechanism, therefore would not incur frictions caused by rebalancing. But the CBBC has a callback mechanism. Once it is called, the investor may lose a significant part, even all of his/her investment capital.
Please note: the CBBC’s leverage may change all the time as the market price of the underlying asset changes. The CBBC will be called, and the investor may lose a significant part, even all of his/her investment capital. Please beware of the risks involved.
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