How Crypto.com contracts are delivered

When a Crypto.com futures contract expires, the seller must deliver the underlying asset to the buyer, while the buyer must pay the seller the contract price.

Nov 26, 2024 at 05:23 am

How Crypto.com Contracts Are Delivered

Crypto.com is a popular cryptocurrency exchange that offers a variety of trading options, including futures contracts. Futures contracts are agreements to buy or sell an asset at a specified price on a future date. They are often used by traders to hedge against risk or to speculate on the price of an asset.

Crypto.com offers two types of futures contracts: perpetual contracts and quarterly contracts. Perpetual contracts do not have an expiration date, while quarterly contracts expire on a quarterly basis. Both types of contracts can be traded with leverage, which allows traders to increase their potential profits (and losses).

When you trade a futures contract on Crypto.com, you are essentially entering into an agreement with another trader to buy or sell the underlying asset at a specified price on a future date. The contract is delivered on the expiration date, and the trader who sold the contract is obligated to deliver the asset to the trader who bought the contract.

The delivery process for Crypto.com futures contracts is as follows:

1. The trader who sold the contract delivers the underlying asset to the trader who bought the contract. This can be done by transferring the asset from the seller's wallet to the buyer's wallet, or by using a third-party escrow service.
2. The trader who bought the contract pays the trader who sold the contract the contract price. This payment is usually made in the form of cryptocurrency, but it can also be made in fiat currency.
3. The contract is considered to be closed, and the traders are no longer obligated to each other.

The delivery process for Crypto.com futures contracts is typically very efficient and takes place within a few minutes. However, there can be delays if there is a problem with the delivery of the underlying asset or if the payment is not made on time.

Steps Involved in Delivering Crypto.com Contracts

1. Trader A initiates a sell order for 10 BTC perpetual futures contracts at a price of $10,000 per BTC.

2. Trader B enters a buy order for 10 BTC perpetual futures contracts at a price of $10,000 per BTC.

3. The Crypto.com matching engine matches Trader A's sell order with Trader B's buy order, and the trade is executed.

4. Trader A is now obligated to deliver 10 BTC to Trader B on the contract's expiration date.

5. Trader B is now obligated to pay Trader A $100,000 (10 BTC x $10,000 per BTC) on the contract's expiration date.

6. On the contract's expiration date, Trader A delivers 10 BTC to Trader B.

7. Trader B pays Trader A $100,000.

8. The contract is considered to be closed, and the traders are no longer obligated to each other.