How to buy short contracts on OuYi

Traders can utilize short contracts on OuYi to speculate on and potentially profit from a decline in asset prices, creating synthetic positions that simulate borrowing and selling the underlying asset with the intent of later repurchasing it to close the position.

Feb 01, 2025 at 01:55 pm

Key Points

• Understanding Short Contracts on OuYi
• Step-by-Step Guide to Buying Short Contracts on OuYi
• Choosing a Trading Pair and Funding Amount
• Placing the Short Contract Order
• Monitoring and Managing Short Contract Positions
• Closing or Cancelling Short Contract Positions

How to Buy Short Contracts on OuYi

1. Understanding Short Contracts on OuYi

• Short contracts, also known as short selling, allow traders to profit from a decline in the price of an asset.
• On OuYi, short contracts represent synthetic positions that simulate borrowing the underlying asset, selling it, and repurchasing it later to close the position.
• Traders can profit if the price of the asset falls during the contract period.

2. Step-by-Step Guide to Buying Short Contracts on OuYi

Step 1: Open an OuYi Account and Fund It

• Create an account on OuYi and complete KYC verification.
• Fund your account with enough funds to cover the initial margin requirement of the short contract.

Step 2: Choose a Trading Pair and Funding Amount

• Choose a trading pair you want to short, such as BTC/USDT.
• Determine the funding amount, which will determine the size of your short position.

Step 3: Place the Short Contract Order

• Navigate to the Futures Trading page and select the Perpetual contract.

• Switch to the "Short" tab and enter the following information:

  • Trading Pair
  • Funding Amount
  • Leverage (optional)

Step 4: Monitoring and Managing Short Contract Positions

• Monitor the market and track the performance of your short contract.
• Consider adding or decreasing the funding amount as needed.
• Use stop-loss orders to protect your potential profits.

Step 5: Closing or Cancelling Short Contract Positions

• Closing: To close a short contract, place an equivalent buy contract to repurchase the underlying asset.
• Cancelling: Short contracts can be cancelled up until the expiration time by paying a cancellation fee.

3. Choosing a Trading Pair and Funding Amount

• Select trading pairs with sufficient liquidity to avoid slippage and ensure timely execution of trades.
• Consider market trends and technical analysis to choose a trading pair that is expected to decline.
• Determine an appropriate funding amount based on your risk tolerance and available capital.

4. Placing the Short Contract Order

• Choose between market orders and limit orders.
• Use limit orders to specify a desired execution price.
• Set a leverage to increase the potential return but also the risk.

5. Monitoring and Managing Short Contract Positions

• Pay attention to the underlying asset's price and trend to make informed decisions.
• Adjust your funding amount or leverage as necessary to manage risks.
• Use stop-loss orders to prevent excessive losses if the market moves against your prediction.

6. Closing or Cancelling Short Contract Positions

• Close short contracts as soon as you have achieved your desired profit target or if the market conditions have changed.
• Pay attention to the cancellation fee associated with cancelling short contracts before the expiration time.

FAQs

Q: What is the minimum funding amount for short contracts on OuYi?

• A: The minimum funding amount varies depending on the trading pair. Refer to the Futures Trading page for specific requirements.

Q: Can I use leverage on short contracts?

• A: Yes, leverage is available for short contracts, but it increases both the potential profit and risk.

Q: How do I calculate the profit or loss from a short contract?

• A: The profit or loss is calculated as the difference between the entry and exit prices, multiplied by the funding amount.

Q: Are short contracts available for all cryptocurrencies on OuYi?

• A: No, short contracts are only available for selected cryptocurrency pairs.

Q: What happens if the underlying asset price increases during my short contract position?

• A: You will incur losses as your obligation to repurchase the asset increases. It is essential to manage your positions and close them when necessary.