Current location - Trademark Inquiry Complete Network - Futures platform - What does permanent contract hedging mean?
What does permanent contract hedging mean?
Simply put, you hedge by opening a position on the 58-currency exchange or opening more ETH/USD, and then buying and selling ETH in the spot leveraged market. But this can only be completely hedged if the BTC/ USD price remains unchanged. Once the price of BTC changes (it keeps changing), hedging will not be established.

For example, suppose your actual profit in a transaction is 1 BTC. At that time, the dollar price of BTC was 8000 dollars. Assuming that the dollar price of BTC depreciates from 8000 to 7000 within one week after the transaction, the profit measured in dollars will also be reduced from 8000 to 7000. On the other hand, if the dollar price of BTC rises from $8,000 to $9,000, your profit will also rise from $8,000 to $9,000.

Therefore, once you make a profit, you must convert BTC into dollars and lock the profit in a fixed dollar amount (in this case, $8,000).