Disclaimer: Trading futures involves a high level of risk and may not be suitable for all investors. Before engaging in futures trading, it is essential to carefully consider your financial situation, risk tolerance, and investment objectives. The information provided in this article is for educational and informational purposes only and should not be construed as financial advice.
Hello everyone, in this article we'll share with you details about the release of Coin-Margin on Storm Trade, tell you how to trade without selling a TON, and share a few tips on how to get the most out of owning your capital.
Storm Trade is an innovative leveraged futures trading exchange available to use directly from Telegram messenger. Keeping up with the times and providing all the best technology to its users, Storm is releasing a major update - Coin-Margin - that will change the way you approach trading!
What are you used to trading? Trick question. Probably everything! On futures exchanges such as Storm, trading is usually done in a single asset, the stablecoin. The scheme of such trading is simple: you open a long or short position in a pair to jUSDT, and then take the profit or pay the loss. What if we tell you that trading can be done with collateral in other coins? This opportunity is exactly what Coin-M brings!
So, there are two types of margin or collateral - in the stablecoin and in other coins. Trading in stablecoin may seem less risky, but it can also have a few downsides, such as the stablecoin unpeg or low liquidity in the ecosystem, as we are seeing with jUSDT in the TON ecosystem.
Coin trading, aka Coin-Margin, brings with it multiples of trading strategies, the variety of which depends only on the trader's imagination.
Coin-Margin futures are a type of derivatives whose margin and value is determined by the based cryptocurrency, i.e. the collateral coin. Because of this, traders can continue to hold their crypto assets as collateral instead of exchanging them for stablecoins.
This method is perfect for those who want to maximise their profits during a rising market or hedge their risk on a fall. For long-term investors, this is also a unique opportunity to enter the futures trading market without converting their assets into stablecoins.
The new instrument offers new opportunities, combining both risks and advantages. The main advantages of coin-margined futures are:
Choice of asset to trade
Ability to trade without selling your assets in stablecoins
Non-linear payout structure and increased profits even on small price movements
Hedging of risks even in a falling market
The main disadvantages of futures with coins in collateral are:
The first and foremost coin to appear as collateral on Storm Trade is Toncoin. This is truly a great event for the entire TON ecosystem because it opens up almost limitless earning opportunities for holders, stakers and traders of TON.
Important: the fee for opening and closing positions in TON-M pairs is 0.2%. Such fees are several times less than those on spot DEX, and at the same time they help to attract more liquidity and ensure low price slippage.
With the launch of TON-Margined futures, there will be a new trading pair - TON/USD-CM - on Storm, as well as a separate vault in TON for liquidity providers.
Later, Storm users will see BTC/USD:TON and other cross-margin instruments.
Example 1 - Long on rising price. Trader Bob decided to open a position towards Long for 100 TON (200 USD at the rate of 2 USD per 1 TON) with x10 leverage.
Of course Bob will be charged a commission for trading and may also pay or receive fundings, but for the sake of simplicity we will omit this point.
The price of TON has doubled, i.e. 100%, from 2 to 4 USD.
What will Bob get when he closes his position?
📌 Let's use the formula for calculating PnL for Coin-Margin futures: PnL = Trade direction * Margin * Entry_price * Leverage * (1 / Entry_price - 1 / Exit_price) Trade direction: Long = 1, Short = -1
Applying the formula above, we count:
1**100**2*10(1/2 - 1/4) = 500 TON, which is x5 to his collateral in TON.
And now the magic of Coin-M: as the price went up 2x, the final profit of the position went up as well, totalling 500*4 = 2000 USD.
Bob did not sell his TONs to trade, but used them in the position itself, increasing his capital along with the profit from the trade!
Example 2 - Long on falling price. The same Bob opened a position in the direction of Long for 100 TON with x10 leverage.
However, this time the price of TON fell instead of rising.
In this case Bob's position will be liquidated at the price of 1.818 USD per 1 TON.
The whole point is that when the price of TON falls, the value of the position collateral also falls, and the liquidation price is inevitably approaching.
Example 3 - Short on a rising price. In this example Bob decided to open a position in the direction of Short for 100 TON (200 USD at the rate of 2 USD per 1 TON) with leverage x2.
The price of TON increased from 2 to 3 USD.
It would seem that Bob's position should be liquidated, but here the magic of TON-margin opens to us again. As the TON rate grew, the position collateral (margin) also grew, which pushed back the liquidation price and helped the trader to exit the position with a partial loss instead of a full liquidation.
Yes, that's how it works!
Example 4 - Short on a price drop. In this example, Bob, anticipating a drop in the price of TON, decides to hedge the risk from holding the token and open a Short for 100 TON (200 USD at an exchange rate of 2 USD per 1 TON) with x10 leverage.
The price of TON predictably falls.
Bob, knowing that his assets will decrease in value, profits from the Storm Trade and offsets the losses of his portfolio, still holding the initial stock of TON in his wallet together with the TON gained from the profitable trade.
Storm Trade team appreciates all early users of our products, so we have some bombastic news for you!
For the first week after launch, all users of TON-margin products, whether trading or providing liquidity, will receive double rewards in Reward Points!
After a week the accrual will return to normal mode. As a reminder, you can always read more about RP rewards and the massive $STORM token drop in our great article.
So friends, in this article we found out that Coin-Margin futures are a great tool for multiples of profit in trades, hedging risks in a falling market and diversifying your trading strategies.
Great times are coming to TON, and Storm Trade aims to take centre stage among the DeFi products of the ecosystem. If you're pondering when to start, start now.
Don't forget about risk management, trade at a comfortable amount of funds, learn new things and expand your trading experience with Storm Trade!
🫂 Join our community
🔗 More info about Storm Trade