Applicable market conditions, operating logic, and potential risk points of dual-currency investment
Dual Currency Investment originated from Matrixport in 2019. After several years of development, it has become relatively mature. It is essentially an option product disguised as a financial product, but it has better liquidity than options.
1. Applicable market conditions
In a nutshell, the rise cannot outperform the spot, the fall is equal to the spot, and the volatility continues to make money
There are few days of rising this year, and most of them are oscillating, which is more suitable. This is one of the accounts. Several exchanges have accumulated nearly 1 million profits
2. Operation logic
Take Binance BTC 8.29/26000 as an example. If you buy 10,000 U, the exchange will open a 10,000 U call option at the same time.
There will be two situations on August 29. The first situation is that the price of the currency is higher than 26,000, assuming 26,500. Then the exchange sells the call option and makes money. Your U is not delivered. The premium earned is converted into days, which is the annualized return. The one who loses money is the trader holding the put option.
In the second case, if the 8.29 coin price is lower than 26,000, let's say 25,500, delivery will be triggered. Your U will buy BTC at 26,000, and the exchange will lose money on the call option, and pay you financial management income, but it will buy BTC from the market at 25,500 and deliver it to you at 26,000. The exchange still makes money, you earn income, but U becomes spot.
3. Potential risk points
At the end of the shock and the beginning of the plunge, if you make a dual currency delivery, it is equivalent to buying spot and being trapped.
The most suitable situation is in the upward trend, after the surge, the market will fluctuate and consolidate. You will not miss the spot market and make full use of funds. Even if the two currencies are delivered in the upward trend, you will not be trapped.
