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Trading perpetuals on OX.FUN: a deep-dive

# Learn
# Trading

Whether you're new to crypto or looking to refine your trading strategies, understanding how to maximize your $OX earnings through trading on OXFUN is essential. Let's explore the mechanics of trading and earning on OXFUN, ensuring you're equipped to make the most out of every trade. 

Basics of Trading with $OX and Quanto Perpetual Futures

$OX isn't just a digital currency on our platform; it's a gateway to innovative trading strategies. Key to these strategies are Quanto Perpetual Futures, a specialized type of derivatives that allow traders to speculate on the price movements of cryptocurrencies without the need to hold the actual asset.

On OXFUN, these futures are settled in $OX, regardless of the base asset's currency. This means that their performance is directly linked to both market movements and the value of $OX. This dual exposure means understanding these types of contracts is crucial for anyone looking to maximize their earnings in $OX.

How Trading Earnings Are Calculated and Affected by $OX Fluctuations

When trading on OXFUN, your earnings and losses are calculated using the $OX multiplier, which is set at a ratio of 1:100. This means every dollar change (USD) in your trade's value results in a 100 $OX change in your account. Here's why understanding $OX fluctuations is essential:

$OX Fluctuations Impact:

  • Profit Amplification: If $OX's value rises during a trade, a profit of, say, 300 $OX could be worth more in USD at the close of the trade than at the opening.

  • Loss Magnification: Conversely, if $OX's value falls, the same number of $OX lost could represent a higher USD loss than expected.

Detailed Calculation Example:

Suppose you start a trade when ETH is at $3000 and it rises to $3300, while $OX's value relative to USD increases by 10% during this period. Using the $OX multiplier:

  • Initial Calculation: A $300 increase in ETH price would normally yield a 30,000 $OX increase (300 x 100 due to the multiplier).

  • Adjusted for $OX Value Increase: If $OX's value rises by 10%, your 30,000 $OX gain is effectively worth 10% more in USD at the end of the trade.

This example underscores how changes in $OX value can significantly affect your trading outcome, emphasizing the need to monitor both asset prices and $OX price over time.

Example: Earning $OX from a Successful Trade

Let’s apply what we’ve learned using a practical example:

Scenario Setup:

  • You start with 1,000 USD collateral in $OX.

  • You go long on ETH at $3,000 per ETH.

  • During your trade, ETH’s price rises to $3,300.

Calculating Earnings in OX:

  • The price change is $300 (from $3,000 to $3,300).

  • With the $OX multiplier of 1:100, this price change results in a 30,000 $OX increase (300 x 100).

  • If you close your position at $3,300, you capitalize on this gain.

Impact of OX Price Change:

  • Suppose the value of $OX relative to USD increases by 10% during your trade.

  • Your 30,000 OX earnings now represent an even greater USD value at the close than at the opening.

This example showcases how trading decisions combined with $OX price dynamics can affect your trading outcomes - It’s crucial to not only consider the market movements of the asset you are trading but also the performance of $OX itself.

Example: Impact of $OX Price Fluctuations During a Trade

To deepen our understanding, let's explore how changes in $OX's value affect your final earnings:

Scenario:

  • Continuing from the previous example, you've earned 30,000 $OX from a successful ETH trade.

Fluctuation Impacts:

  1. $OX Value Increases by 10%:

    • Your 30,000 $OX is now worth more in USD. If initially 1 $OX = $0.10, it's now $0.11. Your earnings in USD are $3,300 instead of $3,000.

  2. $OX Value Decreases by 10%:

    • Conversely, if $OX's value drops, your 30,000 $OX might only be worth $2,700 in USD.

Example: Setting a Take Profit Order

Understanding Take Profit Orders:

A take profit order is a type of limit order that closes your position once a cryptocurrency reaches a specific price, locking in your profits. This tool is crucial for managing risk and securing gains without needing to monitor the market constantly.

Scenario:

  • You have a long position in ETH, and you set a take profit order at $3,300 per ETH.

Calculation of Potential Earnings:

  • Assuming you bought 1 ETH at $3,000 and set a take profit at $3,300:

    • If the take profit order is executed, you gain $300.

    • With the $OX multiplier of 1:100, this translates to a gain of 30,000 OX.

Impact of OX Price Changes:

  • If the value of $OX increases by 10% during this time, the USD equivalent of your $OX earnings could also increase, enhancing your profitability.

By understanding how trading earnings are calculated, the impact of $OX price fluctuations, and the nature of Quanto Perpetual Futures - you should be set to begin trading on OXFUN. For a more technical overview of Quanto Perps including specific formulae, please feel free to refer to this support article. 

Embrace these insights, start small, learn continuously, and leverage the resources available on OXFUN to ensure the best possible trading experience. Good luck!