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How do the strategies differ from one another in terms of their approach and application ?
How do the strategies differ from one another in terms of their approach and application ?
Updated over 2 months ago

Spot-to-Spot Strategies

BTC as Index (Bull Market)

This strategy utilizes USD to trade in the BTC spot market. It programmatically purchases BTC when the price trends low and sells when it trends upward, generating profits in USD.
As one of the safer options, this strategy avoids leverage, is widely available on most exchanges, and operates exclusively during the bull market cycle.
CB010 is the strategy relevant to this kind.


Coin Spot Strategy (Bear Market)

This method uses the spot market to programmatically sell the coin when its price trends higher and repurchase it when the price trends downward, accumulating profits denominated in the traded coin.

This strategy offers a secure way to amass the chosen cryptocurrency without using leverage, is available on most exchanges, and operates exclusively during the bear market cycle.
CB001, CB004, and CB007 are the strategies relevant to this kind.


Accumulation Pairs Strategy (Bull Market)

This strategy leverages the spot market to programmatically trade between specific cryptocurrency pairs to accumulate more of the base currency. By identifying opportunities where one coin in the pair is undervalued relative to the other, the strategy buys low and sells high to consistently grow holdings of the target asset.

  • SOLBTC: Focuses on accumulating BTC by trading the SOL/BTC pair.

  • SOLETH: Focuses on accumulating SOL by trading the SOL/ETH pair.

These strategies operate on bull market cycles, avoid leverage, and are designed for users seeking to grow their cryptocurrency holdings through pair-based trading.


Derivatives Strategies

Inverse Derivatives/Swaps (All Market Cycles)

This strategy employs a specific cryptocurrency to trade in the inverse derivatives or swaps markets. Depending on the market cycle, it programmatically buys (longs) or sells (shorts) contracts priced in USD when their price trends against the system's direction.

It then closes the trade profitably when the trend reverses, allowing settlement of profits in the original cryptocurrency regardless of the strategy's direction.
While it is the most popular strategy among clients, it carries the risk of a margin call and is available in all market cycles.
CB002, CB005, and CB008 are the strategies relevant to this kind.


Linear Derivatives (Bear Market)

This approach uses USD to engage in linear derivatives markets. It employs the BTC index to programmatically sell (short) BTC contracts priced in USD when their price trends higher and repurchase them when the trend reverses downward.

This strategy settles profits in USD and is exclusively available during the bear market cycle.
CB011 is the strategy relevant to this kind.


Linear Derivatives using Coin as Collateral (All Market Cycles)

This strategy utilizes a specific cryptocurrency as collateral to trade in linear derivatives markets. It uses the collateral coin's index to programmatically sell (short) contracts priced in USD when their price trends higher and repurchase them when the trend reverses downward.

This approach allows for profit settlement in USD even though the collateral is denominated in cryptocurrency.
This strategy is available across all market cycles.
CB003, CB006, and CB009 are the strategies relevant to this kind.


Important Considerations for Derivatives Strategies

When engaging in derivative strategies, users should be aware that, due to convexity and leverage, there exists a price point at which the position will face liquidation unless additional margin is added to the account, known as a margin call. This accounts for both the initial margin used and the effects of convexity.

Our platform adopts a conservative approach to risk management:

  • For inverse derivatives and linear derivatives using cryptocurrency as collateral, we limit leverage to a maximum of 1.5x out of the 125x possible. This conservative leverage level provides approximately a 40% safety net (measured from the average price) before additional margin is required to maintain the position.

  • For linear derivatives strategies using USD, we further reduce the maximum leverage to 1.0x out of 125x possible. This provides an even more conservative safety net of approximately 100% before additional margin is required.

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