Financial dry goods sharing 2 👀❤️

Hello everyone~ I'm Emma, same! If something is not well written, or if you have other experiences to share, please leave a message below and let me know><

ok everybody! Say good morning/afternoon/night to you first, I hope this article can help Matters friends understand better

Dual Currency Wealth Management is an investment product~

Today I want to share the investment product "Dual Currency Wealth Management" in the cryptocurrency world.

Before sharing, the article should be divided into four parts:

1. The origin of dual currency wealth management

2. Operational concept of dual currency wealth management

3. The concept of dual currency wealth management and derivative financial products in the traditional financial market

4. What kind of person is suitable for dual currency financial management

<Origin of Dual Currency Financial Management>

I believe that many people in the currency circle know about dual-currency financial management. In Pionex / Binance Binance

Have heard of it, or have seen and actually operated it in their APP.

If you are a novice in the currency circle like me, this may be the first time you have heard of this investment tool.

Dual currency wealth management is a non-guaranteed derivative financial product. It originates from dual currency investment (DCI) in foreign exchange. It makes profits through changes in exchange rates and different settlement currencies.

*Additional knowledge*

Dual Currency Wealth Management comes from:

Dual-Currency Investment (also known as DCI) is a foreign exchange product involving two currencies, which is formed by combining "foreign currency time deposits" and "selling exchange rate options".

The advantages of dual currency financing are:

1. High flexibility of funds

2. Low investment threshold (varies according to the minimum number of coins traded on different exchanges)

3. Commodity conditions / days are free to choose

Of course, it is said that dual currency wealth management is a derivative financial product, and there must be so-called risks:

1. The exchange rate market fluctuation risk is the main source of risk. When the dual currency wealth management expires, it needs to be traded at the agreed pegged price. Determines whether the principal of the commodity will be exchanged for another currency at the conversion rate.

2. Not a capital-guaranteed investment vehicle

<Operation Concept of Dual Currency Wealth Management>

Suppose today that I use the USDT / BTC trading pair to use dual currency financing, attach my use of ACE dual currency

Screenshot of finance.

I choose one-day USDT/BTC dual currency financing on 8/26.

On 8/26, the pegged price of BTC to USDT is: 21,000USDT

*Additional knowledge*

The pegged price Currency Peg / Pegging: The pegged price is derived from the exchange rate ratio of the national currency to another national currency. The pegged price can reduce market uncertainty and stimulate the economy and trade.

Take Taiwan dollar as an example, if it is 1 USD=30 NTD, then 1USD=30NTD is the pegged price.

If at 16:00 on 8/27, if 1BTC ≥ 21,000USDT, I can get back USDT greater than 165.5USDT invested on 8/26.

Conversely, if 1BTC≤21,000USDT at 16:00 on 8/27, I will get back 0.0079 BTC.

It can be seen from the screenshot record: 1BTC≤21,000USDT at the time of settlement at 16:00 on 8/27.

It's a pity ~~ A large part of it is because of the fact that on the evening of 8/26 in Taiwan, US Federal Reserve Chairman Powell delivered a hawkish speech at the annual meeting of global central banks, suggesting that the Federal Reserve will still aggressively raise interest rates in September, leading to the panic index. The VIX soared.

In the cryptocurrency market, BTC usually has a great linkage with the U.S. stock S&P 500 index (SPX), so it is not unexpected that the currency price plummeted QQ

<Concept of Dual Currency Wealth Management and Derivative Financial Products in Traditional Financial Markets>

I believe that the little friends who read this, if they have a little concept of the traditional financial market, they will feel that dual currency financing is very similar to "futures and options"!

*Additional knowledge*

In fact, futures and options are an excellent tool for hedging and speculation in the market.

Futures contract, referred to as Futures, is a transaction method that spans time and is a type of derivative financial product . By signing a contract , the buyer and the seller agree to deliver a specified quantity of spot goods at a specified time, price and other trading conditions.

The predetermined price at which both parties agree to buy and sell an asset is called the forward price.

Option Four basic trading positions: Buy/Sell Call Option & Buy/Sell Put Option, Call option grants the holder (Buyer) at a specific time & expiry date at the "strike price" Exercise price / Strike price, buy specific assets. The call rights holder can have the right to perform the contract or not! However, the call option holder must first pay the premium/margin Premium. The premium refers to the price paid by the buyer for the option to be paid to the seller by the Seller/Writer.

But the seller "must" perform the put

Exp:

Emma is going to make an agreement with her friend Alice today to buy her Chanel bag for 200,000 yuan on 2022/9/1. But Alice was afraid that Emma would run away or lie to her, and asked Emma to pay Alice 50,000 yuan first as a royalty, as Emma's right to buy a Chanel bag.

Time comes to 9/1, and Alice's Chanel bag in the boutique market has risen to 260,000! So Emma buys it with the agreed 200,000 yuan, and Emma earns 10,000 yuan now!

260,000-200,000-50,000 (premium) = 10,000

Even if Alice is reluctant, she still has to perform the put right!

However, if Alice's Chanel bag drops to 150,000 on 9/1, Emma has the right to perform the contract. If Emma chooses to perform the contract (normally, no XD), she will also use 200,000 yuan to buy Alice's Chanel bag.

Conversely, if Emma does not choose to perform the contract, Emma will not be able to get back her security deposit, and Alice will now earn 50,000 yuan

There is a disadvantage for Alice: Alice can't force Emma to buy Chanel bags

For the buyer, net profit from investing in call options = option value - premium

For the buyer in the futures and options market: unlimited profit & limited loss

In the futures and options market for sellers: limited profit & unlimited loss

<What kind of person is suitable for dual currency wealth management>

1. People with spare money

2. People who can tolerate currency price fluctuations

3. People who want to earn high income

4. Some people who do not know how to invest their idle assets

5. People who like flexible investing

Thank you very much to everyone who read the article ><!

*Also remind everyone: any investment has risks, so be sure to use idle funds and do your homework before making any investment! I wish everyone can be their own Buffett and spend the bear market together~~

I hope you enjoy this sharing of financial dry goods! ! ❤️

see you next time~~~