17 December 2017: Money Trade Coin, the new age cryptocurrency has generated superior returns for its investors since its recent launch and will follow the suit in times to come.
It is the world’s first cryptocurrency which is powered by its latest and cutting-edge Blockchain Technology, which provides its investors with the safest and ultra-secure trading platform through its multi-level verification system while following KYC and AML guidelines. The group led by Dr. Amit Lakhanpal, the creator of Money Trade Coin, offers a plethora of services in cryptocurrency space from Wallet Services to owning Exchange Business. They also assist interested parties in imparting education in cryptocurrency space and have started an academy in Estonia, which provides multiple courses on cryptocurrencies. They have an established footprint around the globe and are one of the fastest growing companies in this space.
Looking at the potential of technological advancement in cryptocurrency space, Money Trade Coin Group once again looks forward to expanding its business. It is foraying its footprints into the derivative segment and on 3rd March 2018. Money Trade Coin will launch its Futures & Options contracts for trading in its own cryptocurrency – Money Trade Coin on its trading platform cointradingplatform.com. With this launch of derivatives segment, Money Trade Coin Group will once again pioneer in another segment – having derivative contracts on its own trading platform.
What are Futures and Options & what would it mean to trade in Money Trade Coin Futures?
In finance, Futures & Options are two forms of derivative contracts. Derivative contracts, as the name suggests are financial products which derive its value from one or more underlying assets. Derivative, a common term used in finance, is a contract between two or more related parties, wherein an asset and its financial value are involved. Popular financial assets like Gold, Silver, Zinc, Copper, Crude Oil, Shares of a company etc are traditional by nature. These financial assets have a Derivative contract, either in the form of Futures or Options or both depending on the services being provided. Each of these Derivative products derives its value from the respective underlying asset.
Futures are financial contracts between a buyer & a seller that obligates the parties to the contract to buy/sell an underlying asset at a future date and price that is predetermined. Such contracts include the detail of quality and quantity of the underlying asset and trading of such futures is facilitated by a regulated exchange. Investors are allowed to take a long (buying) or a short (selling) position in futures market based on individual price predictions. At the expiry of such contracts, some are called for physical delivery of the underlying asset whereas others are settled by cash which takes into consideration the present market value of the asset. To simplify, here’s an example of how Money Trade Coin futures would ideally work.
Let’s say the current market price of MTCOIN futures is $8.68. There’s a buyer who bought 1000 MTCOIN futures at this rate. Now, at the expiry of this contract, if the value of MTCOIN, the underlying asset, shoots up by $15, the buyer of this futures contract will gain a handsome amount of: 1000 MTCOIN x ($15 – $8.68) = $6,320.
Similarly, a seller of the same contract at a similar rate would have lost $6,320. However, if the prices of MTCOIN were to fall, the seller would have gained some money and vice-a-versa.
Similarly, options, in derivative segment, is a contract that gives a right to the buyer of options to buy/sell an underlying asset on a particular date at a predetermined rate. However, the buyer of the options contract is not obligated to exercise his right at the expiry of the contract. In Options terminology, the right to buy is called a ‘Call Option’ and the right to sell is called ‘Put Option’. There are four ways in which an investor can trade in Options segment viz., Buying/Selling of Call Options and Buying/Selling of Put Options. A buyer of options is termed as ‘Buyer’ who pays the premium to purchase the right but is not obligated. A seller of options is termed as ‘Writer’ who receives the premium from the buyer and is obligated to buy/sell the underlying asset if the ‘Buyer’ exercises his right. There are various strategies wherein, a trader trades in options contract but to simplify, let’s take an example of a Plain Long Call:
A buyer has bought MTCOIN call at a strike price of $8.50 and paid a certain premium to the writer for purchasing such right. Now at the expiry of the Options contract, given the Buyer is in a bullish position, if the value of MTCOIN increases to let’s say $15, the Buyer will exercise his right and the Writer will be obligated to sell him MTCOIN at the rate of $8.50, giving the Buyer a profit of $6.50 (less the premium paid) per MTCOIN bought. However, if the value of MTCOIN declines below $8.50, the Buyer will not exercise his right to buy as it is available in the market at a cheaper rate. So the Buyer will only lose the premium amount that he had paid.
Specifications of Money Trade Coin Contracts in Futures & Options:
- All the futures and options contracts will have the option of cash settlement, meaning buyers or sellers won’t have to worry about physical deliveries of MTCOIN at expiry. Only the difference in profits/losses will be settled with cash.
- Margin facility which gives the traders an opportunity to take leveraged positions and make huge gains with limited capital.
- The contract size will be 1 MTCOIN per lot.
- Duration of the contracts will range from Weekly, Biweekly, Monthly & Quarterly.
Apart from these specifications, the Option Writers will have the facility to choose between deposit margin or cryptocurrency to the custodian for writing options.
How Money Trade Coin Futures and Options benefits to traders and investors:
With the launch of the derivative segment in Money Trade Coin, it brings many benefits to its traders and investors. It brings transparency to the system of Cryptocurrency. Price discovery of MTCOIN will be efficient as more and more participants will trade in its derivatives contracts. Higher liquidity for MTCOIN will be created that will balance the market conditions. For experienced and professional investors it brings an opportunity to take hedging positions in cryptocurrency space and benefit by way of economies of scale. Whereas with the help of technical analysis, for traders, it brings them an opportunity to take short to long-term leveraged positions and make excellent returns with limited capital. Over and above this, the group is generous enough to provide its platform and trade in futures and options contracts without you paying any brokerage. So, now you can experience the technology at free of cost and once you have a go through for the same, you can start professionally.
These are some revolutionary introductions that Money Trade Coin Group is making in the cryptocurrency space. Once in effect, it will change the face of cryptocurrencies and how they are perceived. A lot of active investors of MTCOIN are eagerly waiting for such financial products to be introduced in the system.
Images courtesy of Mony Trade Coin Group