How Poloniex contracts are delivered

On Poloniex, futures contracts are settled in cash, meaning buyers receive the price differential, while sellers do not receive the underlying asset.

Nov 24, 2024 at 11:06 am

How Poloniex Contracts Are Delivered

Poloniex is a cryptocurrency exchange that offers a variety of trading options, including futures contracts. Futures contracts are agreements to buy or sell an asset at a set price on a future date.

When you trade a futures contract on Poloniex, you are not actually buying or selling the underlying asset. Instead, you are agreeing to exchange the difference in price between the current price and the future price.

If you believe that the price of the underlying asset will rise, you can buy a futures contract. If you believe that the price will fall, you can sell a futures contract.

Futures contracts are a leveraged product, which means that you can potentially multiply your profits (or losses). However, it is important to remember that leverage can also increase your risk.

Delivery of Futures Contracts

When a futures contract expires, it is either settled in cash or delivered. Cash settlement means that the difference in price between the current price and the future price is exchanged in cash. Delivery means that the underlying asset is actually transferred from the seller to the buyer.

On Poloniex, all futures contracts are settled in cash. This means that you will not receive the underlying asset if you buy a futures contract. Instead, you will receive the difference in price between the current price and the future price.

Steps to Delivering a Futures Contract

1. The futures contract expires.
2. Poloniex calculates the difference in price between the current price and the future price.
3. Poloniex sends the difference in price to the buyer of the futures contract.
4. The buyer of the futures contract receives the difference in price.
5. The seller of the futures contract does not receive anything.

Benefits of Delivering a Futures Contract

There are a number of benefits to delivering a futures contract, including:

• You can potentially lock in a profit. If you have bought a futures contract and the price of the underlying asset has risen, you can deliver the contract to lock in your profit.
• You can reduce your risk. If you have sold a futures contract and the price of the underlying asset has fallen, you can deliver the contract to reduce your loss.
• You can hedge your risk. If you have a long position in the underlying asset, you can sell a futures contract to hedge your risk against a decline in price.

Risks of Delivering a Futures Contract

There are also a number of risks associated with delivering a futures contract, including:

• You could lose money. If you deliver a futures contract and the price of the underlying asset has fallen, you could lose money.
• You could be forced to sell. If you do not have the underlying asset to deliver, you could be forced to sell it in order to meet your obligation.
• You could be subject to margin calls. If you are trading with leverage, you could be subject to margin calls if the price of the underlying asset moves against you.