How to open high-multiple contracts in Bithumb

To open high-multiple contracts in Bithumb, choose an underlying asset, open an account, fund it, select a contract, place an order, manage your risk, and withdraw profits when necessary, considering factors like volatility and leverage.

Nov 19, 2024 at 06:34 am

How to Open High-Multiple Contracts in Bithumb

Introduction

High-multiple contracts are a type of derivative financial instrument that allows traders to speculate on the future price of an underlying asset using leverage. This means that traders can potentially amplify their profits or losses by using a multiple of their own capital. Opening high-multiple contracts can be a complex and risky undertaking, so it is important to understand the process before getting started.

Step 1: Choose an Underlying Asset

The first step is to choose an underlying asset to trade. Bithumb offers a wide range of underlying assets, including cryptocurrencies, stocks, and commodities. When choosing an underlying asset, it is important to consider the following factors:

• Volatility: The volatility of an asset is a measure of how much its price fluctuates. High-volatility assets can provide greater opportunities for profit, but they also come with greater risk.
• Liquidity: The liquidity of an asset is a measure of how easily it can be bought and sold. High-liquidity assets are easier to trade, which can reduce slippage and improve profitability.
• Correlation: The correlation between two assets is a measure of how they move in relation to each other. High-correlation assets tend to move in the same direction, which can make it difficult to profit from trading them against each other.

Step 2: Open an Account with Bithumb

Once you have chosen an underlying asset, you need to open an account with Bithumb. To open an account, you will need to provide your personal information, including your name, address, and date of birth. You will also need to verify your identity by providing a government-issued ID.

Step 3: Fund Your Account

Once you have opened an account, you need to fund it with enough capital to cover your trading activities. Bithumb accepts a variety of payment methods, including bank transfers, credit cards, and cryptocurrencies.

Step 4: Choose a Contract

Bithumb offers a variety of high-multiple contracts, including perpetual contracts and futures contracts. Perpetual contracts are contracts that have no expiry date, while futures contracts have a fixed expiry date. When choosing a contract, it is important to consider the following factors:

• Contract size: The contract size is the number of underlying assets that each contract represents.
• Leverage: The leverage of a contract is the multiple of the trader's own capital that they can use to trade.
• Fees: Bithumb charges a variety of fees for trading high-multiple contracts, including trading fees, funding fees, and withdrawal fees.

Step 5: Place an Order

To place an order, you need to specify the contract you want to trade, the quantity you want to trade, and the price you want to trade at. You can also choose to place a limit order or a market order. A limit order is an order that will only be executed at a specified price or better, while a market order is an order that will be executed at the best available price.

Step 6: Manage Your Risk

High-multiple contracts are a leveraged product, which means that they come with a high degree of risk. It is important to manage your risk carefully by using stop-loss orders and position sizing. A stop-loss order is an order that will automatically close your position if the price of the underlying asset moves against you by a specified amount. Position sizing is the practice of trading with a position size that is appropriate for your risk tolerance and account balance.

Step 7: Withdraw Your Profits

If your trade is profitable, you can withdraw your profits by selling your contract and withdrawing the proceeds to your bank account or cryptocurrency wallet. Bithumb charges a withdrawal fee, so it is important to factor this into your trading strategy.

Conclusion

Opening high-multiple contracts in Bithumb can be a complex and risky undertaking, but it can also be a rewarding one. By following the steps outlined in this guide, you can increase your chances of success and minimize your risks.