MCS | What Is The Value Of 1 Contract For Cryptocurrency Derivatives?

6 months ago

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Greetings from MCS, the derivatives trading platform where traders ALWAYS come first.

Unlike regular spot tradings, cryptocurrency derivatives are traded in contract units. Many MCS traders are asking how the value of one contract is calculated. In this post, I will explain how to calculate the value of a contract for cryptocurrency derivatives products.

The Concept of Inverse and Quanto

Currently, there are two types of cryptocurrency derivatives trading on MCS. The Bitcoin perpetual contract on MCS is an inverse derivative, and derivatives other than the Bitcoin perpetual contract are called quanto derivatives.

What is an Inverse derivative?

Inverse means that the derivatives are settled in the base currency, not the relative quote currency. All derivatives trading pairs have a base currency and a quote currency. For BTC/USDT pair, BTC is the base currency and USDT is the quote currency. In simple terms, you can think of the asset indicated first in the trading pair as the base currency, and the asset indicated later as the quote currency. The Bitcoin perpetual contract on MCS is BTC/USDT, and the position is settled in BTC, the base currency.

What is a Quanto derivative?

Quanto refers to a derivative instrument that is settled as an asset other than the base or the quote currency. For example, an ETH/USDT derivative on MCS is not settled in ETH, the base currency, and not in USDT, the quote currency, but is settled in BTC. This is called a quanto derivative.

What is the Value of 1 MCS Bitcoin Perpetual Contract on MCS?

The value of 1 Bitcoin perpetual contract on MCS is fixed at USD 1. This is the rule designed by MCS. So, if you have a position of 10,000 Bitcoin perpetual contracts, you are holding a position worth USD 10,000.

What is the Value of 1 Quanto Derivatives Contract on MCS?

The value of 1 quanto derivatives contract on MCS is calculated by the following formula:

1 Contract Value (in BTC) = Price X Trading Multiplier

Here, the trading multiplier refers to the contract size of each derivative. The contract size for each derivative can be found on the "MCS Data" page. The contract sizes are also carefully designed by MCS.

Ex) What is the value of 1 KLAY contract?

As you can see in the above KLAY perpetual contract information, the contract size is 0.0001 BTC.

Assuming the current price of KLAY is 0.55 USDT, the value of one contract is 0.55 X 0.0001 BTC, which is 0.000055 BTC.

You can easily calculate the value of a contract for other quanto derivatives on MCS.

I hope this post was helpful to you, and if you still have questions, please do not hesitate to ask our MCS Experts at any time through MCS Live Chat.

Traders ALWAYS come first on MCS

Thank You.


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Published 6 months ago