Disclaimer: Trading futures involves a high level of risk and may not be suitable for all investors. The information provided in this article is for educational and informational purposes only and should not be construed as financial advice. Do your own research before start trading.
Hello everyone, in this article we'll share with you details about the release of TON-Margin on Storm Trade, tell you how to trade without selling TON, and share a few tips on how to get the most out of owning your capital.
Enjoy reading!
Storm Trade is the first Social-Fi exchange for leveraged futures trading, available for use directly from Telegram messenger. Keeping up with the times and providing all the best technology to its users, Storm is releasing a major upgrade - leveraged futures in TON that will change the way you trade!
💰 Types of Margin on Futures Exchanges
What are you used to trading? On perp DEXs such as Storm, trading is usually done in one asset - stablecoin. The scheme of such trading is simple: you open a long or short position in the USDT pair, and then take a profit or pay a loss. What if we told you that the trade could be done with collateral in other coins?
Trading in a stablecoin may seem less risky, but it can also carry a few downsides, such as decoupling the stablecoin from $1 or low liquidity in the ecosystem, the second we've seen in the TON ecosystem. And although the influence and use of the Tether in the TON network will grow stronger after the arrival of Tether in the ecosystem, at the moment most of the users' assets lie in the TON token.
That's why we present you new trading pairs with collateral in TON. TON-margin trading (or TON-M for short) brings with it a multiplication of trading strategies, the variety of which depends only on the trader's imagination!
🤔 TON-Margined futures. Definition
Futures contracts to TON set the price of the asset against USD, using Toncoin as collateral. Changes in the exchange rate of the TON token directly affect the level of the position collateral, which in turn determines the position liquidation price.
As the value of the TON token increases, the liquidation price moves away from the initial opening price of the position, and as the token rate decreases, the liquidation price moves closer to the opening price of the position.
This method is perfect for those who want to increase their profits during market growth or hedge their risks 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.
⭐️ TON-marginal futures. Advantages and disadvantages
Since January 2024, 2 trading pairs to TON have been available on Storm Trade: TON/USD-CM and 1mNOT-F/TON, which showed great popularity among the exchange's traders. Today, 10 trading pairs to TON are available on Storm Trade, and TON/USD-CM remains the most popular of them.
TON-M provides new opportunities, combining both risks and benefits.
The main advantages of futures with TON to provide are:
-
Choice of asset to trade and expanded trading opportunities,
-
The ability to trade without selling your TON for stablecoins,
-
Non-linear payout structure and increased profits even on small price movements,
-
Hedging of risk even in a falling market.
The main disadvantage of futures with TON in collateral is the rapid reduction of collateral when volatility is high.
The emergence of TON as collateral and the opening of new trading pairs is a great event for the entire TON ecosystem because it opens up almost limitless earning opportunities for holders, stakers and coin traders.
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.
❓ Let's look at examples
Example 1 - Long on rising price. Trader Bob decided to open a Long position for 100 TON (700 USD at the rate of 7 USD per 1 TON) with x10 leverage.
Of course Bob will be charged a fee 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 7 to 14 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*7*10(1/7 - 1/14) = 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*14 = 7000 USD.
Bob did not sell his TON 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 6.2 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 (700 USD at the rate of 7 USD per 1 TON) with leverage x2.
The price of TON increased from 7 to 9 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 (700 USD at an exchange rate of 7 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.
🎁 Double boost of rewards for the first users of TON-margin
For all TON-M users, whether trading or providing liquidity, there is an RP mining programme, thanks to which users can accumulate Reward Points and get the STORM token airdrop, which will take place after IDO.
As a reminder, you can always read more about RP rewards and the massive $STORM token drop in our excellent article.
✌️ TON-margin. Preparing for trading
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
Website | Telegram bot | Blog | Docs