How does the derivative trade life cycle work in the context of digital currencies?

1 answers

• Mar 16, 2022 · 3 years ago
  In the context of digital currencies, the derivative trade life cycle can vary depending on the platform or exchange where the trades are executed. For example, on the BYDFi exchange, the life cycle typically starts with the creation of a derivative contract, which can be a futures contract or an options contract. These contracts are then traded on the exchange, where buyers and sellers can enter into agreements. Once a contract is executed, it enters the holding period, during which the buyer and seller wait for the contract to reach its expiration date. At expiration, the contract is settled, and the buyer and seller exchange the agreed-upon amount of digital currency. Throughout this process, traders can monitor the value of their contracts and make decisions based on market conditions. It's important to note that the derivative trade life cycle can involve risks, and traders should carefully consider their strategies and risk tolerance before engaging in derivative trading.
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