ETP Strategy

ETP introduction

ETP (Exchange Traded Products) is a leveraged product that multiples profits or losses by doubling long or doubling short digital assets. For example, for every 1% increase in BTC, the NAV of BTC*3 increases by 3%, and the NAV of BTC*(-3) decreases by 3%. , the NAV of BTC*(-1) fell 1%. Unlike margin trading or futures trading, users do not need collaterals and there is no risk of liquidation, but the product has a large fluctuation range, so be aware of the risk.

Two sentences to understand ETP

  1. Compared with underlying asset, ETP can triple profit.

Behind each ETP product is a basket of margin positions of Huobi Global. For example, BTC*3 corresponds to 3 times long BTC, ETP uses margin to achieve 3 times long BTC; when users buy 1 BTC*3/USDT, the system will correspond to 3 assets of BTC/USDT of margin positions, so as to achieve 3 times the profit in the unilateral rise.

  1. The system automatically adjusts the position, there is no risk of liquidation

Through daily position adjustment, the system will increase profits and reduce losses on the positions corresponding to ETP to ensure that the underlying BTC asset positions corresponding to users BTC*3 are always at 3 times leverage.

Click HERE for more information on ETPs>>>

What is ETP>>>

Fluctuation of ETP's NAV in Different Market Environments>>>

Further reading:

How do ETP products perform under different market conditions? The following are examples:

  1. Enlarge profit and loss

Assuming BTC as an example, if BTC rises by 5%, then BTC*3 will generate 15% profit. For details, please refer to the following table:

BTC rise and fall

NAV of

BTC*3 rise and fall

NAV of

BTC*(-3)rise and fall

NAV of

BTC*(-1)rise and fall
10.00%30.00%-30.00%-10.00%
5.00%15.00%-15.00%-5.00%
-5.00%-15.00%15.00%5.00%
-10.00%-30.00%30.00%10.00%
  1. Unilateral market, enlarge profits and narrow down loss

Taking BTC as an example, assuming that BTC rises by 5% every day, the cumulative increase [1] after 3 days is 15.76%, the cumulative increase of BTC*3 is 52.09%, the cumulative decrease of BTC*(-3) is -38.59%, BTC*(- 1) The cumulative decline was -14.26%. For details, please refer to the table below:

 BTC rise and fall

NAV of

BTC*3 rise and fall

NAV of

BTC*(-3) rise and fall

NAV of

BTC*(-1) rise and fall
First day5%15%-15%-5%
Second Day5%15%-15%-5%
Third day5%15%-15%-5%
Cumulative change15.76%52.09%-38.59%-14.26%
  1. Market fluctuations may cause potential loss

In a volatile market, if the BTC's rise and fall within 4 days are 5%, -5%, 5%, and -5%, the cumulative rise and fall are -0.5%[2], the cumulative rise and fall of  NAV of BTC*3 It is -4.45%[3], which is higher than -0.5%*3=-1.5%. Therefore, in the volatile market, ETP products may cause protential loss.

 BTC rise and fall

NAV of

BTC*3 rise and fall

NAV of

BTC*(-3) rise and fall

NAV of

BTC*(-1) rise and fall
First day5%15%-15%-5%
Second Day-5%-15%15%5%
Third Day5%15%-15%-5%
Fourth Day-5%-15%15%5%
Cumulative change-0.50%-4.45%-4.45%-0.50%

[1] Cumulative increase and decrease of BTC=105%^3-1=15.76%

[2] In the volatile market, the cumulative increase and decrease of BTC=105%*95%*105%*95%-1=-0.50%

[3] In the volatile market, the cumulative increase and decrease of NAV of BTC*3=115%*85%*115%*85%-1=-4.45%

Note: API users who newly open ETP trading are required to answer all questions on the web page or mobile app before trading any ETPs.

Risk Reminder : There is a possibility that the NAV of ETP can become zero or the product will be removed due to inherent market risks, high fees, slippage, rebalance algorithm frontrunning and any other perceived unknown risks associated with ETP

 

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To get more ETP knowledge, please click the link below:

ETP Fee Disclosure>>>

The Difference between ETP, Margin and Futures>>>

API instructions>>>

Identity Authentication Requirements:

Due to local laws and regulations, the following countries and regions are temporarily unable to trade ETP products, including Belarus, Myanmar, Congo, Cuba, Canada, Chinese Mainland, Hong Kong (China), Iran, Iraq, Côte d’Ivoire, Japan, Liberia, North Korea, Sudan, Syria, the United States, Zimbabwe.