How to play Upbit BTC contract

On Upbit, traders can capitalize on Bitcoin price movements using BTC contracts with high leverage of up to 20x, allowing them to enhance potential profits and losses.

Nov 16, 2024 at 06:38 am

How to Play Upbit BTC Contract

Upbit, the leading cryptocurrency exchange in South Korea, offers a wide range of trading options, including spot trading, margin trading, and futures contracts. In this article, we will focus on how to play Upbit BTC contract, a popular way to trade Bitcoin with leverage.

1. Understanding BTC Contract on Upbit

BTC contract on Upbit is a futures contract that allows traders to speculate on the future price of Bitcoin without actually owning the underlying asset. It is a highly leveraged product that can magnify both profits and losses.

Key Features of BTC Contract on Upbit:

• Contract Size: 5 BTC
• Tick Size: 1 USDT
• Maximum Leverage: 20x
• Funding Rate: Charged every 8 hours (positive or negative)

2. Opening a BTC Contract Position

To open a BTC contract position on Upbit, follow these steps:

• Log in to your Upbit account and navigate to the 'Futures' section.
• Select 'BTC' from the list of trading pairs.
• Choose whether to go 'Long' (betting on price increase) or 'Short' (betting on price decrease).
• Enter the desired contract size and leverage (up to 20x).
• Confirm the order by clicking 'Buy' or 'Sell'.

3. Managing Your BTC Contract Position

Once you have opened a BTC contract position, you can manage it through the 'Positions' tab:

• Stop Loss and Take Profit Orders: Set these orders to automatically close your position at a predetermined price, limiting potential losses or securing profits.
• Reduce Leverage: Decrease the leverage on your position to mitigate risk if market conditions become unfavorable.
• Increase Margin: Add additional funds to your margin account to avoid liquidation if the market moves against you.

4. Understanding Liquidation and Funding Rate

• Liquidation: If the market moves against you significantly and your margin falls below the required maintenance margin, your position will be liquidated to cover losses.
• Funding Rate: The funding rate is a periodic payment made between long and short positions every 8 hours. It reflects the demand and supply imbalance in the contract market.

5. Closing a BTC Contract Position

To close your BTC contract position, follow these steps:

• Navigate to the 'Positions' tab and select the BTC contract position you want to close.
• Enter the number of contracts you want to close and click 'Close Position'.
• Confirm the order by clicking 'Close' again.

6. Advantages and Disadvantages of Trading BTC Contract on Upbit

Advantages:

• Leverage up to 20x amplifies profit potential.
• Shorting capability allows traders to profit from price declines.
• Convenient platform with user-friendly interface.

Disadvantages:

• High leverage can magnify losses as well as profits.
• Exposure to liquidation risk if market moves against you.
• Regular funding rate payments can impact profits or losses.