Author: TechFlow

"The bull market is the main reason for the loss of ordinary investors."

Graham's words apply to any trading market, whether it's the stock market or the cryptocurrency market. The frenzy of the bull market makes everyone afraid of missing out, and all kinds of retail investors rush in. After a capital feast, someone has to pay the bill. Will you be the one paying the bill?

As the saying goes, being able to sell is the master. But selling with regret is still painful, so most people are in the state of "being trapped after buying, and selling with regret after selling". They regret not buying enough when the price goes up, and regret not selling when the price goes down. They are in pain all the time.

In addition to adjusting the mindset and strategy, for a mature trader, the necessary financial tools can help you preserve profits and achieve stable appreciation in the bull market.

The question is, do you really understand what the "seagull, shark fin, Martingale, dual currency win..." so-called things are in the product list of the exchange?

This editor complains that although major exchanges have launched a lot of crypto financial products, whether it's simple coin earning or complex option structured products, there are still no easy-to-understand explanations of the operating mechanism and source of income, and which type of trading demand they are suitable for.

Don't believe it, let's do a simple test to see if investors really understand the cefi products of major cryptocurrency exchanges?

I. Simple Coin Earning and On-chain Coin Earning

【Multiple Choice】Li plans to invest in financial management on the OKX platform. He saw two products: simple coin earning and on-chain coin earning. The following statements are correct:

A. Simple coin earning supports deposit and withdrawal at any time, while on-chain coin earning usually has a lock-up period

B. The yield of on-chain coin earning is generally higher than simple coin earning, but the risk is also relatively higher

C. The funds of simple coin earning are mainly used for internal platform configuration, and the income comes from leverage lending, etc., while on-chain coin earning directly participates in the staking and lending of the blockchain network

D. If Li wants the most secure investment method, simple coin earning will be a more suitable choice

Correct answer: B, C, D

Analysis:

1. Option A is incorrect:

   Both simple coin earning and on-chain coin earning are current account products, and both support deposit and withdrawal at any time, with relatively high financial flexibility, the only difference is that the redemption time may be slightly different.

2. Option B is correct:

   On-chain coin earning directly participates in the staking or lending of the blockchain network, and the yield is generally higher, but it also needs to bear the risks of verification node, network, etc.

3. Option C is correct:

   The funds of simple coin earning are mainly used for platform lending and other businesses, while the funds of on-chain coin earning flow to the chain, participating in Aave lending or on-chain staking and other activities.

4. Option D is correct:

   Simple coin earning is more suitable for low-risk preference new users.

Strategy Analysis:

Both are current account financial management returns, taking into account both the yield and liquidity, suitable for idle fund low-risk financial management. Recently, the on-chain financial management yield of OKX has even exceeded 40%.

II. Grid Trading

【Single Choice】Wang set up a BTC/USDT grid trading strategy on OKX with the following parameters:

• Investment amount: 1000 USDT

• Price range: 95000-100000 USDT

• Grid quantity: 10 grids

• Profit per grid: 0.5%

Assuming that the BTC price fluctuates completely within the set range (i.e., from 95000 to 100000 to 95000), without considering the transaction fee, the theoretical total return is approximately how many USDT?

A. 5 USDT

B. 25 USDT

C. 50 USDT

D. 100 USDT

Correct answer: C

Analysis:

1. Grid basic parameter calculation:

   • Price range: 95000-100000 USDT, range span 5000 USDT

   • Grid quantity: 10 grids

   • Price interval per grid = 5000/10 = 500 USDT

   • Profit per grid: 0.5%

2. Grid trading principle:

   The system will evenly distribute 10 grids in the 95000-100000 range. When the price rises, it will sell for profit, and when the price falls, it will buy. Whenever the price crosses a grid line, a transaction will be triggered

3. Profit calculation:

   • Complete up and down fluctuation = upward process + downward process, each grid will complete a round-trip of buying and selling

   • 10 grids × 0.5% profit/grid × 1000 USDT = 50 USDT

Strategy Highlights:

This strategy is suitable for sideways market, not suitable for unilateral trend market. The more grids, the smaller the single grid profit, and the higher the transaction frequency.

III. Martingale Strategy

【Single Choice】Li uses the Martingale strategy to trade BTC/USDT on OKX with the following parameters:

• Initial position: 0.01 BTC (about 970 USDT)

• Replenishment multiple: 2 times

• Replenishment times: up to 4 times

• First entry price: 97000 USDT

If the price continues to fall and triggers full replenishment, and the price rises back to 97000 USDT for liquidation, which of the following options is closest to the total investment amount without considering the transaction fee?

A. 3880 USDT

B. 7760 USDT

C. 15520 USDT

D. 31040 USDT

Correct answer: D

Detailed Analysis:

1. Martingale strategy capital calculation:

   Total investment: 0.31 BTC ≈ 31040 USDT

   1. 1st position: 0.01 BTC ≈ 970 USDT

   2. 2nd position: 0.02 BTC ≈ 1940 USDT

   3. 3rd position: 0.04 BTC ≈ 3880 USDT

   4. 4th position: 0.08 BTC ≈ 7760 USDT

   5. 5th position: 0.16 BTC ≈ 15520 USDT

2. Replenishment process explanation:

   1. Each replenishment is twice the previous position

   2. After 4 replenishments, a total of 5 positions are opened

   3. The position grows exponentially: 1 time → 2 times → 4 times → 8 times → 16 times

Strategy Highlights:

The "Martingale strategy" is a trading strategy based on a gambling method popular in France in the 18th century. The main principle of this strategy is to double the trader's losing bet each time. In this way, when the gambler wins (each time is considered a 100% win/loss of the bet), not only will the previous loss be recovered, but also the profit of the first bet amount will be obtained.

The Martingale strategy is suitable for short-term sideways market, not suitable for trending downward market. It is recommended to use it in a sideways range.

Beginners are not recommended to use this strategy, and need to strictly implement the stop-loss discipline and control the timing of each replenishment.

IV. Smart Arbitrage

【Single Choice】Zhang set up a smart arbitrage strategy on OKX with the following parameters:

• Investment amount: 10000 USDT

• Spot position: Buy 0.1 BTC (price 98000 USDT)

• Contract position: Short 0.1 BTC (20x leverage)

• Current funding rate: 0.02% (every 8 hours)

Assuming the position is held for 7 days and the BTC price finally returns to 98000 USDT, without considering any fees and margin calls, which of the following options is closest to the total return?

A. 35 USDT

B. 41 USDT

C. 52 USDT

D. 63 USDT

Correct answer: B

Detailed Analysis:

Funding fee income calculation:

• Contract notional value: 98000 × 0.1 BTC = 9800 USDT

• Single funding fee income: 9800 × 0.02% = 1.96 USDT

• 3 times funding fee per day: 1.96 × 3 = 5.88 USDT/day

• Total funding fee income in 7 days: 5.88 × 7 = 41.16 USDT

Strategy Analysis: The smart arbitrage strategy involves taking a long position in the spot market and a short position in the futures market, aiming to profit from the funding rate paid by the short position. The key is to maintain a balanced position and closely monitor the funding rate to capture the arbitrage opportunity.

Intelligent arbitrage strategy is a method aimed at obtaining stable returns by hedging market price fluctuations. The core principle is to use a Delta-neutral strategy, by holding opposite and equal positions in the spot market and the contract market to hedge the risk of price changes. Users mainly realize profits through the funding fees collected during the holding period (such as the income under the positive funding rate).

It's like running a "rent collection" small business, by hedging to avoid the risk of price fluctuations, and mainly earning money by collecting contract rents (funding fees).

V. Seagull

【Single Choice】Which of the following statements about the OKX Seagull options product is correct?

A. Seagull options are most suitable for investors who expect a significant market upside

B. The maximum profit can be obtained when the price breaks through the barrier price ceiling

C. When the price is between the strike price and the barrier price, a predetermined return can be obtained

D. It will definitely lose the entire principal when the price is lower than the strike price

Correct answer: C

Detailed analysis:

- A is wrong: Seagull options are suitable for investors with a "neutral-bullish" market outlook, not for those expecting a significant upside

- B is wrong: When the barrier price is breached, the usual payoff is zero

- C is correct: This is the core profit characteristic of Seagull options, where a fixed return can be obtained within the price range

- D is wrong: The specific loss depends on the product terms, and the entire principal may not necessarily be lost

Strategy analysis:

You can understand it as a "range betting game". You set a price range (upper and lower limits), and as long as the price fluctuates within this range, you can make money. But if the price goes too far out of this range, you will lose. The name "Seagull" comes from the shape of the payoff diagram, which resembles a seagull's outstretched wings.

OKX Seagull products are divided into call seagull and put seagull, with call seagull allowing users to invest in USDT and earn USDT, and put seagull allowing users to invest in BTC/ETH and earn BTC/ETH.

Overall, Seagull options are a strategy suitable for those expecting a sideways market, aiming for stable returns rather than outsized profits.

VI. Dual Currency Win

【Single Choice】Wang purchased a BTC/USDT dual currency win product on OKX. The following statement about this product is correct:

A. Regardless of the BTC price at maturity, the principal will be returned in USDT form

B. The product yield is fixed, and a predetermined annual yield can be obtained at maturity

C. If the BTC price is lower than the trigger price at maturity, the principal will be converted to BTC at the trigger price

D. The product term is usually 3 to 6 months

Correct answer: C

Detailed analysis:

1. Why is option C correct?

This is the core mechanism of the dual currency win product. When the BTC price is lower than the trigger price, the principal will be converted to BTC at the pre-agreed trigger price.

2. Reasons why the other options are incorrect:

• A is wrong: At maturity, the outcome may be USDT or BTC, depending on the market price

• B is wrong: The predetermined yield can only be obtained when the price is above the trigger price

• D is wrong: The product term is usually much shorter, generally 1-14 days

Strategy analysis:

Dual currency win is like a "conditional time deposit":

Deposit one currency (e.g., USDT), agree on a maturity (e.g., 7 days), and if the price at maturity is higher than the target price, you get back USDT, otherwise it is converted to another currency (e.g., BTC).

Essentially, it is a short-term (1-14 days) structured financial product. This strategy is suitable for those who want to hold USDT and earn high yields, as well as those who are bullish on BTC's long-term development and want to buy BTC at a low price during BTC pullbacks.

VII. Shark Fin

【Single Choice】Li purchased an OKX shark fin options product, with an initial investment of 10,000 USDT. The following description of the product features is correct:

A. Regardless of market fluctuations, the maximum loss at maturity is 2,000 USDT

B. When the price reaches the barrier price, the product will immediately terminate and the entire principal will be lost

C. The product provides 100% principal protection, and in the worst case, the entire principal can be recovered

D. The product yield is fixed, and a predetermined annual yield can be obtained at maturity

Correct answer: C

Detailed analysis:

1. Why is option C correct?

Shark fin options are usually principal-protected products, meaning the principal can be protected even if the barrier price is reached, which is the most important safety feature of the product.

2. Reasons why the other options are incorrect:

• A is wrong: The product is principal-protected, and there will be no principal loss

• B is wrong: Reaching the barrier price will only affect the profit part, not the principal

• D is wrong: The yield is not fixed, and depends on the price performance and whether the barrier price is reached

Strategy analysis:

Shark fin is like a "bet with protection":

Invest a sum of money (e.g., USDT), set a bullish or bearish direction, and if you guess correctly, you can earn a high return, and if you guess incorrectly, there is a guaranteed minimum return to protect the principal. The payoff diagram resembles a shark's fin, hence the name "shark fin".

This strategy is suitable for conservative investors who prioritize the safety of their principal.

So, dear crypto investor, how many points did you score?

Finally, let's summarize the features of the above products: