FAQS
1. What is a Profit Swap Contract?
A Profit Swap Contract is a financial derivative that allows users to speculate on the price movements of an underlying asset (e.g., BTC or ETH) for a fixed period. Users pay a one-time premium and earn profits based on the price difference at settlement without the risk of liquidation.
2. How does Profit Swap differ from traditional spot trading?
Spot Trading: Users buy or sell actual tokens at current market prices, requiring full investment capital.
Profit Swap: Users pay a small premium to gain exposure to price movements, allowing leveraged returns without owning the underlying asset.
3. How is my profit or loss calculated?
Profit or loss is determined using the formula:
Profit/Loss = (Settlement Price - Entry Price) × Direction × Quantity
Direction is 1 for Call (upward) and 1 for Put (downward).
Settlement Price is the index price of the asset at expiration or manual settlement.
4. Are there any risks involved?
The risk is limited to the premium amount paid when purchasing the contract. There is no liquidation risk, and the user cannot lose more than their initial investment.
5. What is the maximum leverage available?
Superp's Profit Swap offers leverage up to 10,000x. The effective leverage increases as the time to expiration decreases.
6. How do I settle a Profit Swap Contract?
You can settle a contract in two ways:
Manual Settlement: Close your position before expiration if the market price is favorable.
Automatic Settlement: Let the contract expire, and the system will automatically settle based on the expiration price.
7. What happens if the market does not move in my favor?
If the market price moves contrary to your prediction (e.g., price decreases for a Call or increases for a Put), you lose only the premium paid when purchasing the contract.
8. What assets are available for Profit Swap Contracts?
Profit Swap Contracts currently support popular digital assets such as BTC, ETH, and other select cryptocurrencies. The platform may expand its offerings over time.
9. Can I use Profit Swap Contracts for hedging?
Yes, Profit Swap Contracts are ideal for hedging strategies. They allow you to manage risk by locking in potential gains or offsetting losses from other positions.
10. Can I close my position before expiration?
Yes, you can manually close your Profit Swap position before expiration if the market conditions are favorable. The settlement amount will be calculated based on the market price at the time of manual settlement.
11. Is there a limit on how many Profit Swap Contracts I can hold at once?
Yes, Superp has risk controls in place to maintain market stability. These include limits on individual user positions, platform-wide positions, and order frequency. These limits may adjust dynamically based on market conditions.
12. Does Profit Swap have slippage issues?
No, Profit Swap Contracts do not suffer from slippage because prices are determined by a fixed index rather than relying on real-time order book depth.
13. What happens if the platform encounters extreme market conditions?
In extreme market conditions, Superp may trigger its Automatic Deleveraging (ADL) mechanism. This reduces the top profitable positions to cover market risks and ensures the stability of settlements. Users are advised to diversify their investments to mitigate potential risks.
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