The bitcoin price is very volatile. There are large movements that happen daily, weekly, or quarterly. FTX MOVE contracts are derivative products that allow you to take advantage of the move in bitcoin price over a particular period.
In this article, we look at how FTX MOVE contracts work and how to trade it on the exchange.
What are MOVE contracts?
MOVE contracts are a derivative product that represents the movement in the price of an asset over a period of time. For instance, if the BTC price moves $200 from the start to the end of the day, the BTC-MOVE contract will expire at $200, whether it went up or down.
Getting a long MOVE contract earns you profits when the BTC price moves a lot, and getting a short MOVE contract earns you profits when the BTC price does not change by much.
MOVE contracts are similar to futures. However, MOVE contracts expire to the amount an asset price has moved while futures expire to the token’s price.
Further, you can purchase a leveraged short or long MOVE contract with collateral, just like futures.
Types of FTX MOVE contracts
There are three types of FTX MOVE contracts you can choose from.
Daily MOVE contracts: This contract expires to the BTC price move at the end of a day. Their ticker is [underlying]-MOVE-[expiration date]. For instance, BTC-MOVE-1012 is the BTC MOVE contract expiring at the end of October 12th UTC.
Weekly MOVE contracts: This contract expires to the BTC price move at the end of 7 days. Their ticker is [underlying]-MOVE-WK-[expiration date]; For example, BTC-MOVE-WK-1019 expires to the amount that BTC moves between the start of October 12th and the end of October 19th.
Quarterly MOVE contracts: This contract expires to the BTC price move at the end of a three months period. Their ticker is [underlying]-MOVE-[expiration year]Q[quarter number];
You can trade multiple move contracts at the same time.
How to trade FTX MOVE contracts
You have to get an FTX account to trade MOVE contracts on the exchange. You can use our referral link to get a 5% discount on trading fees.
You can find various MOVE contracts available for trading in the ‘Volatility’ tab on the ‘Markets’ page.
Click on the contract you want to purchase to continue. On the trading interface, you can buy or sell your MOVE contract. You will need a USD balance to trade FTX MOVE contracts.
Margin on FTX MOVE contracts
MOVE contracts require as much collateral as a regular contract. For instance, BTC-MOVE requires the same collateral as a BTC contract.
This collateral structure is due to the fact that MOVE contract price changes in the same amount the underlying index will change, making the risk profile alike.
For example, the BTC-MOVE contract (ticker for the one-day BTC move contract) requires approximately the same amount of margin as a BTC-PERP contract.
Let’s say you want to purchase a long contract with $1,00 in your account, and the BTC-MOVE contract is trading at $250. You will be able to purchase four move contracts since you do not need extra collateral aside from the contract’s price.
If you want an in-depth understanding of this, you can check out this video by FTX.
How does FTX calculate MOVE PnL?
The PnL will be marked to market until the contract expires–meaning that your PnL will be (number of MOVE contracts bought) * (mark price – purchase price).
When the contract expires, it is replaced in your account with the amount of USD equal to its expiration price.
FTX MOVE contracts are interesting cryptocurrency derivative product that gives you unique exposure to the market. You get to advantage of the volatile nature of the cryptocurrency market. Fees for trading MOVE contracts are the same as the trading fees for regular trades on FTX.