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Author: Admin | 2025-04-28
1 BTC at $10,000 and Robbie commits to selling 1 BTC at $10,000 when the contract expires.Bitcoin’s price one week later, on the settlement date, will determine whether these two traders see gains or losses. One week passes and Bitcoin is trading at $15,000. This means that Adam, who had agreed to purchase 1 BTC for $10,000, makes a gain on his contract, earning $5,000. Adam, as agreed, only needed to pay $10,000 for 1 BTC, which he can immediately sell for its current market value of $15,000.Robbie, on the other hand, loses $5,000, since he has to sell his 1 BTC for the agreed-upon price of $10,000, even though it’s now worth $15,000. Depending on the asset Adam and Robbie used, OKX settles the contract in stablecoin Tether (USDT) or BTC, crediting Adam’s or Robbie’s account with the realized gain or loss.Since expiry futures agreements reflect the expectations of market participants, indicators such as the BTC long/short ratio can provide a quick view of general sentiment. The BTC long/short ratio compares the total number of users with long positions versus those with short positions, in both expiry futures and perpetual futures.BTC long/short ratio. Source: okx.comWhen the ratio stands at one, it means an equal number of people are holding long and short positions (market sentiment is neutral). A ratio higher than one (more longs than shorts) indicates bullish sentiment, while a ratio below one (more shorts than longs) indicates bearish market expectations.Why do people buy and sell BTC via expiry futures agreements?Why would someone enter into an expiry futures agreement to buy or sell Bitcoin instead of trading BTC directly on the spot market? Generally, the two answers are risk management and speculation. Managing riskExpiry futures have long been used by farmers seeking to reduce their risk and manage
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