Poloniex contract playing rules

Understanding Poloniex's contract trading rules, including choosing contracts, placing orders, managing risk, closing positions, and understanding fees, is essential before embarking on this potentially lucrative but risky trading endeavor.

Dec 02, 2024 at 12:54 pm

Poloniex Contract Playing Rules

Poloniex is a popular cryptocurrency exchange that offers a variety of trading options, including contracts. Contracts are a type of derivative that allows traders to speculate on the future price of an asset without actually owning it. This can be a risky but potentially lucrative way to trade, and it's important to understand the rules before you get started.

1. Choosing a Contract

The first step is to choose a contract to trade. Poloniex offers a variety of contracts, including:

• Futures: Futures contracts are agreements to buy or sell an asset at a set price on a future date.
• Options: Options contracts give the buyer the right, but not the obligation, to buy or sell an asset at a set price on a future date.
• Perpetuals: Perpetual contracts are similar to futures contracts, but they do not have an expiration date.

Each type of contract has its own advantages and disadvantages. Futures contracts are the most straightforward, but they can also be the most risky. Options contracts offer more flexibility, but they can also be more complex to trade. Perpetual contracts are a good option for traders who want to avoid the risk of expiration, but they can be more expensive than futures contracts.

2. Placing an Order

Once you have chosen a contract, you need to place an order to buy or sell it. You can do this through the Poloniex trading interface. When placing an order, you need to specify the following:

• The type of order: You can choose between a market order, a limit order, or a stop order.
• The order size: This is the number of contracts that you want to buy or sell.
• The price: This is the price at which you want to buy or sell the contracts.
• The leverage: This is the amount of leverage that you want to use. Leverage can magnify your profits, but it can also magnify your losses.

3. Managing Your Risk

It's important to manage your risk when trading contracts. Here are a few tips:

• Use stop-loss orders: Stop-loss orders can help you to limit your losses if the price of the asset moves against you.
• Trade with a small position size: Don't risk more money than you can afford to lose.
• Use leverage carefully: Leverage can magnify your profits, but it can also magnify your losses. Only use leverage if you understand the risks involved.

4. Closing a Position

Once you have decided to close a position, you need to place an order to do so. You can do this through the Poloniex trading interface. When closing a position, you need to specify the following:

• The type of order: You can choose between a market order, a limit order, or a stop order.
• The order size: This is the number of contracts that you want to close.
• The price: This is the price at which you want to close the contracts.

5. Fees

Poloniex charges a variety of fees for trading contracts. These fees include:

• Trading fees: Trading fees are charged on each trade that you make.
• Maker fees: Maker fees are charged to traders who create orders that are not immediately filled.
• Taker fees: Taker fees are charged to traders who fill orders that were created by other traders.
• Margin fees: Margin fees are charged to traders who use leverage.

The Poloniex fee schedule is available on the Poloniex website.