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What is a contract transaction?
What is a contract transaction? 1 A contract transaction refers to a transaction in which the buyer and the seller agree to accept a certain amount of an asset at a certain price at a certain time in the future. The transaction object of contract transaction is the standardized contract formulated by the exchange, which stipulates the standardized information such as commodity type, trading time and quantity. This contract represents the rights and obligations of the buyer and the seller. To put it simply, it is now agreed to trade a certain amount of a certain commodity at a certain time and place in the future. Contract trading is a financial derivative. Compared with spot market transactions, users can judge the ups and downs in futures contract transactions, and choose to buy long contracts or sell short contracts, thus obtaining the benefits brought by price ups and downs.

2. What is the function of contract transaction? The original intention of standardized contract design is to hedge the spot risk. Companies or individuals engaged in commodity trading, in order to lock in the cost of income and hedge the risk of large fluctuations in spot prices, will carry out short (long and short) operations in the futures market to resist risks. Digital asset contract transactions represented by bitcoin usually use price difference delivery. When the contract expires, the system will deliver and settle all positions at the delivery price without opening positions.

3. Trading time of contract trading rules (1). The contract transaction is a 7*24-hour transaction, which is interrupted only when it is settled or delivered every Friday 16:00(UTC+8). At the last 10 minute before delivery, the contract can only be closed, not closed. (2) transaction type. There are two types of transactions: start and end. Opening and closing positions are divided into buying and selling directions: buying more (bullish) refers to buying a certain number of new contracts when users are bullish and optimistic about the index. Carry out "buy more" operation, and increase long positions after successful matching. Beashy refers to a certain number of new contracts sold when users are bearish or bearish on the index. Perform the "sell and open positions" operation, and increase the short positions after successful matching. Closing a short position refers to the buying contract that users make up when they are no longer bearish on the future index market, which offsets the current selling contract and thus withdraws from the market. The "buy short positions" operation will reduce short positions after successful matching.

(3) sorting method. Limit order: the user needs to specify the price and quantity of the order. Limit orders can be used to open and hold positions. Counter-price order: if the user chooses to order at a counter-price, the user can only enter the order quantity, but not the order price. The system will read the latest rival price (if the user buys, the rival price is1; If it is sold, the rival price is 1), and a limit order for the rival price is issued. (4) position. The user owns the position after opening the position, and the positions of the same contract and the same direction will be merged. A contract account can only have six positions at most, that is, long positions in one week, short positions in one week, long positions in the next week, short positions in the next week, long positions in quarterly contracts and short positions in quarterly contracts. (5) Order restrictions. The platform will limit the number of positions held by a single user and the number of orders placed by a single opening/closing position in a contract with a certain term to prevent users from manipulating the market. When the number of positions held or entrusted by users is too large, which may cause serious risks to the system and other users, the platform has the right to require users to take risk control measures including but not limited to canceling orders and closing positions. The platform has the right to take risk control measures including but not limited to limiting the total number of positions, limiting the total entrusted amount, limiting the opening of positions, withdrawing orders and forcibly closing positions.