Singapore-headquartered crypto exchange Huobi has recently kicked off the Huobi Derivative Market otherwise known as the Huobi DM. The Huobi team states that the new platform will enable users to purchase or sell digital currencies “at predetermined prices at specified times in the future.” This gives investors an opportunity to decide whether they want to start “long or short positions.”
The BTC contract is the first derivative available on the platform although a range of other contracts will eventually be. Other derivatives have yet to be revealed.
Contract settlement, which will be based on Singapore time, is expected to take place on a weekly, biweekly, or quarterly basis. Furthermore, each contract will be equivalent to a particular amount of cryptocurrency. For instance, a BTC contract’s face value is $100.
While Huobi DM features several appurtenances, a derivative market is not new in the cryptocurrency industry. One good example is Japan’s SBI Holdings which has purportedly acquired 12 percent of US-based derivative trading service Clear Markets in a bid to develop a crypto derivative trading platform. In the case of Huobi, the platform provides customers the capacity to select their “leverage multiplier” (1x, 5x, 10x, or 20x). Huobi will also be giving its early traders “surprises,” including the power to receive Huobi Tokens based on several activities.
Still in its beta testing phase, Huobi DM is presently unavailable to residents in a number of countries and territories namely the United States, Israel, Iraq, Hong Kong, Cuba, Iran, North Korea, Sudan, Malaysia, Syria, American Samoa, Puerto Rico, Guam, Bangladesh, Ecuador, Kyrgyzstan, and Singapore.