\This post has been written by Hedgehog, an MCS influencer and one of Korea's famous cryptocurrency key opinion leaders.*submitted by MyCoinStory to MyCoinStory [link] [comments]
Greetings from MCS, the derivatives trading platform where traders ALWAYS come first.
As a cryptocurrency perpetual contract trader, you may have seen the index price and the mark price at least once while trading. It seems that many traders are confused about the differences between the index price and the mark price, so I will explain these two prices and the dual price mechanism used in perpetual contracts.
🎯 What is the Dual Price Mechanism?The dual price mechanism consists of the mark price and the last traded price. This mechanism protects traders from damages caused by market manipulation, lack of liquidity, or differences in spot prices and futures prices. It also provides a fair trading environment for all traders on MCS, and is used to minimize the price gap between spot prices and the perpetual contract prices.
In order to fully understand the concept of mark price, you first need to know the concept of index price.
🎯 Index PriceYou can think of the index price as a spot price. The MCS cryptocurrency derivatives exchange refers to a total of 7 exchanges to calculate the BTC/USDT index price, and the exchanges are Binance, Bitfinex, Huobi Global, OKEX, Bittrex Global, HitBTC, and Poloniex. So basically, the index price of the MCS BTC/USDT perpetual contract is the average price of the same cryptocurrency pair's prices on the aforementioned 7 global exchanges.
🎯 Mark PriceThe mark price is the price reflecting the status at-the-moment of the MCS exchange to the index price. The mark price is also known as the fair price in some exchanges. The formula for calculating the mark price is "Index Price * (1 + Funding Basis)", and the formula for calculating the funding basis is "Current Funding Ratio * Time Remaining Until Funding Settlement / Funding Interval". Since the calculated mark price represents a more accurate perpetual contract price, the MCS cryptocurrency derivatives exchange uses this mark price as a measure to trigger the liquidation.
🎯 Last Traded PriceThe last traded price is the market price of a pair (like BTC/USDT) on the MCS exchange. In short, it refers to the most recent price of the actual trade on MCS.
If you have understood the concepts of each of the above terms, this question will pop up in your head: "so, why do we need a dual pricing mechanism?" Let me answer that question with an example.
🎯 Why Use The Dual Price Mechanism[Example]
The mark price and the last traded price are at similar levels of 10,000 USDT and 10,001 USDT, respectively. At this time, Bob wants to enter a short position with 100x leverage using his entire Bitcoin inventory on MCS. At that moment, the last traded price suddenly drops to 5,000 USDT causing the rapid fluctuation in price. Nevertheless, the mark price remains at 10,000 USDT.
In this situation, if the last traded price was used as a measure of liquidation, most of the long-positions with leverage would have been liquidated. Therefore, in order to prevent unfair liquidation like the case above, MCS applies the dual price mechanism.
I am a Bitcoin margin trader, Hedgehog. Thank you for reading this post.
🔸 MCS Official Website : https://mycoinstory.com
🔸 MCS Telegram : https://t.me/mycoinstory_en
Traders ALWAYS come first on MCS.
MCS Official Twitter (EN): https://twitter.com/mycoinstory_mcs
MCS Official Facebook: https://www.facebook.com/MyCoinStory.official
Purchase Bitcoin Through Pos Bitcoin Etf Sweden News For Bitcoin Bitcoin Price Table Reddit Bitcoin Sportsbook New Cryptocurrency To Mine . Purchase Bitcoin Through Pos Bitcoin Fluctuation Purchase Bitcoin Through Pos Blockchain Maintenance Bitcoin Stack Exchange Bitcoin Millionaire Free Online Game Bitcointalk Omisego Purchase Bitcoin Through Pos Bitcoin Faucets Current Bitcoin Price On Coin ... LITECOIN on Latest Cryptocurrency News Today! Just what you need to know to win big money with crypto coins. Check what are the trends in the digital currency market. Learn when is the best moment to buy Bitcoins or other Altcoins like Bitcoin CASH, Ether, Litecoin, Ripple and a lot more. Cryptocoin exchanges & Bitcoin news today. Explore the top 50 cryptocurrencies with Coinbase, including cryptocurrency price charts, crypto descriptions, and the latest price of Bitcoin and Ethereum. Bitcoin price follows the law of supply and demand in general. When it comes to the supply of Bitcoin, you have guarantees: * A finite supply of 21 million BTC. * An inflation of new Bitcoin produced every day which is divided by two for every 210... Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a commodity or financial instrument, at a predetermined future date and price. The CEO of Binance, the world’s biggest cryptocurrency exchange, has continued with his optimistic slant for the company as the new year approaches.. Terming 2018 as the “year of correction”, Changpeng Zhao is maintaining that current prices are a real boon for investors and this fact along with the increasing volume of DLT applications being produced by developers will push the adoption ... — Binance (@binance) August 10, 2019. How Dusting Attacks Work. In order to understand how a dusting attack works, it is first important to understand how Bitcoin and Litecoin transactions work. Bitcoin transactions consist of inputs and outputs. The coins sitting in a wallet, which are called the inputs, are gathered together to send a transaction. There are typically a couple of outputs ... Why bitcoin rise causes altcoins to drop? Bitcoin has grown significantly in the last few days. From what I can see on Binance, price of the majority of altcoins has dropped significantly relative to bitcoin at the same time. I've been ... exchanges altcoin trading exchange-rate price-volatility. asked Feb 28 '18 at 8:50. Ivan Yurchenko. 99 5 5 bronze badges. 1. vote. 2answers 48 views How to ... Binance Bitcoin Opinion Changpeng Zhao Exchanges . Binance CEO ‘Very Confident’ in Cryptocurrency Industry’s Future. December 23, 2018 ...
[index]          
Crypto Coins Covered: Bitcoin BTC Ethereum ETH Ripple XRP Bitcoin Cash SV BCH BSV Binance Coin BNB EOS Stellar XLM Litecoin LTC Tether USDT Monero XMR Cardano ADA IOTA Dash Tron TRX Ethereum ... Bitcoin did the unthinkable early this morning and lost support at $7,500, causing the cryptocurrency to plunge to $5,800 in a 30-minute long hell candle. The sell0ff driven by growing coronavirus ... BITCOIN MARKET CRASH!! In today's free btc bitcoin price analysis - we look at the correlation associated with the huge bitcoin price drop, the corona virus, and the recent announcements made by ... WHAT IS REALLY CAUSING BITCOIN PRICE TO FALL? Cryptocurrency News Update - Mt Gox Sell Off Not It? Cryptocurrency News Update - Mt Gox Sell Off Not It? - Duration: 8:22. Donations wallet address BTC 13QvB2RE9vhhyzcu6ryR5G6R8qGGyTnaaA ETH 0x05b774f38a728ce520c949ce1e22156fe70940d0 XRP rJn2zAPdFA193sixJwuFixRkYDUtx3apQh Deposit tag ... BTC - Bitcoin Technical Analysis price today 14.6.19 Binance kicks out US citizens from their site in 90 days which causes panic throughout the market; when I smell blood I seek opportunity ... Bitcoin rewards last fell on 9 July 2016 at the point of the second halving – an event which saw the block reward fall from 25 new bitcoin per block to 12.5 bitcoin. Bitcoin’s price surged ... March 2019 - Is Binance BNB one of the top altcoins of 2019? Binance coin has had a monster run in 2019. With its price almost doubling, will Binance go up o...