Forex companies often prohibit cross-building, but are virtual currency exchanges prohibited from cross-building? And what exactly is a two-story building? I am writing an article including that. You will need to know this before actually trading.
Is it possible to build both houses?
Bybit allows you to hedge in some currency pair trades. Only part of it. Both denominations can be traded only with the “USDT perpetual contract”, which is the trade of the currency pair BTCUSDT. Otherwise, it will be a violation of the terms of use, so please do not do it as there is a risk of account suspension.
What is both houses?
Both denominations refer to having a “buying position” and a “selling position” of the same currency pair at the same time. In other words, there is no gain or loss. I often do this when I don’t know which way the market is going, but it’s a technique for beginners. Because when you become a skilled trader, you can only buy or sell. If you don’t know which one, you will be lost in judgment, and as a result both will end with a loss.
Advantages of co-building
Virtual currencies tend to be difficult to predict because the market is highly volatile. By building both positions, there is a way to do a little research, hold only the position that is likely to move significantly, and cut the loss on the other position. If you can make good use of both constructions, you can make a profit even in the short-term trend that moves in the opposite direction to the medium- to long-term trend while following the medium- to long-term trend.
Disadvantages of co-building
Both houses have the characteristic that it is difficult to judge the settlement timing. Therefore, especially for beginners, you do not know when to settle, and in the end, both selling and buying can end up being a loss cut. To take advantage of the hedges and make a profit, you need enough skill to know when to unwind. Another thing to keep in mind when using both houses is that the fee will be doubled. Transaction fees are charged when a position is opened and closed, and funding fees are charged when a position is held for a long period of time.
Hedging method
Hedging is only allowed on USDT perpetual contracts. Please log in first. If you do not have an account, please create an account from the article below.
First, go to the home screen. Select USDT perpetual from “Derivatives” in the top menu.
On the right side of the transaction screen, the column for setting the order details will be displayed. If you want to build both, first select “Entry order” and decide one order. After that, it will be the flow of ordering the other one.
Bybit offers the following three ordering methods, so please choose the method that suits you best.
Limit: You can specify a price and it will be executed at that price or better.
Market: Execution at the current orderable price
Conditional: Specify conditions and order only when the conditions are met
Both houses are difficult
By the way, building both is not that easy. You can understand this by trying it out, but depending on the timing, you can end up incurring losses on both buy and sell positions.
Markets never move in one direction
The biggest factor that makes trading difficult is that it does not always move unilaterally. The market price of virtual currencies basically has many ranges. It would be nice if a trend appeared unilaterally, but it is possible for ranges to continue without a clear direction, and the reality is that ranges tend to occur more often overall. .
timing is everything
If you place a buy and sell position at the same time, the key point is how quickly you can close the position that has moved in the negative direction. There is also a good chance that a positive position will return, so if you do not clarify where you will take profits, even a positive position may turn negative.
decide how to fight
As mentioned above, in theory, double-denominated prices do not end in negative territory, but this theory does not apply to the market. Therefore, it is most important to decide how to fight from the beginning. If you don’t decide beforehand where to cut your losses and where to take profits, you will end up having trouble making payments forever.
Double fees apply
Since it is necessary to hold and settle both buy and sell orders at the same time, a total of 4 fees are required. Therefore, the disadvantage is that the commission is twice as much as regular trading, so you should consider whether it is worth going that far.
Margin required for 2 positions
Since it is necessary to hold both buy and sell orders at the same time, the two positions are ordered using different margins. Therefore, you will need to have a large amount of margin. Of course, in theory, the margin is zero, but if the price suddenly moves significantly, one position will be cut out.
Funding rate is negative
If the funding rate is negative and you cross over while holding a position, you will have to pay a fee. Please note that the funding rate can be positive or negative.
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