Trading des InstaFutures

FAQ

• What are InstaFutures like?
  InstaFutures are a trading instrument developed by InstaTrade which enables traders to earn on EUR/USD price fluctuations. A futures contract allows a trader to speculate on the direction of the currency pair, either up or down, at the end of the contract term. Quotes are set in the range of 0.9999 to 0.0001 where 0 means that a forecast has failed and 1 means that a forecast has come true. For example, a trader reckons there is a 60% chance that EUR/USD will grow by the end of the week, i.e. at the expiration date. In this case, a trader sets a price at 0.6.
• What are the principles of trading InstaFutures?
  A contract is made for the term of 1 week. Trading begins at 00:00 (the time displayed on a trading platform) on Monday and closes at 21:00 on Friday (the time displayed on a trading platform). When trading InstaFutures, clients of the broker bet entirely against each other.

  The essence of trading InstaFutures is a prediction of the EUR/USD direction by the closing time on Friday (21:00) relative to the time of opening a contract. The current price of InstaTrade is determined on the grounds of supply and demand among all participants. If a trader expects EUR/USD to rise, he/she buys the currency pair at the current price. Alternatively, if a trader assumes the pair to fall, he/she makes a sell contract. The amount of a gain always equals the amount of a loss. The company charges a commission of 0.5%. InstaFutures can be sold within a week before the expiry date of a contract, i.e. earlier than at 21:00 on Friday. A trader is free to do this if he/she thinks that the expected result is getting less probable, so the solution could be to fix a profit or a loss.

  Besides, traders have an opportunity to choose the best price for InstaFutures on the basis of the order book. The mechanism of such deals is as follows:

  • а) Traders place pending orders (limit orders) at preferable levels;
  • b) Trader N wants to buy or sell InstaFutures immediately and agrees with the price in the nearest pending orders. What is more, he/she buys at the best (!) price of all available ones;
  • с) Trader N can make a deal at that price in a volume which does not exceed the total volume of all pending orders at that particular price;
  • d) If the volume is not enough, a deal will be made at the nearest price of other pending orders.

  The result of a weekly trading session is finalized as follows.

  1. If EUR/USD closes on Friday at a price higher than an opening price on Monday, the buyer gains a profit.

  2. If a closing price is lower, the seller gains a profit. A profit/loss is reckoned by means of a special calculator.

  InstaFutures are traded on InstaTrade’ own trading platform and on MT4 which can be also downloaded on mobile devices. MT4 is available on the App Store and Google Play.  InstaFutures are designated as EURUSDweek on MetaTrader 4. Since January 4, 2021, InstaFutures can be traded in a longer session which is one month long. They are designated as EURUSDmonth on trading platforms. The rules and terms of trading monthly InstaFutures are the same as for weekly InstaFutures.
• What advantage can be gained from trading InstaFutures?
  Participants trade entirely against each other without any involvement of the broker. A profit amount always equals a loss amount minus the broker’s commissions. Hence, InstaFutures are an excellent simulator that will help you exercise trading skills, practice market analysis, and develop market vision. You learn how to make good trading decisions and, above all else, you have an opportunity to earn.
• What exactly does InstaFutures price consist of? 
  InstaFutures are traded in two ways: by making trades at market quotes and by setting pending (or limit) orders for those who are not ready to pay a market spread. A trader sets up a spread and places a limit order. All orders are amassed in the order book. When an opposite order pops up in the market with a similar price or there is a futures contract on the terms of immediate execution, the asset is actually bought or sold. InstaFutures can be sold before an expiration term if a trader thinks that his/her prediction gets less probable or he/she wants to fix a profit/loss accumulated since the moment of opening a contract. The exact value of a futures contract depends on a demand/supply balance as well as a volume of actual trades among InstaTrade clients.
• What is the duration of an InstaFutures contract?  Are InstaFutures subject to the 5-minute rule applied when trading currency pairs?
  No strict rules are set out for the duration of an InstaFutures contract. A trader is free to close a deal in a second after its opening.
• How is a spread with InstaFutures contacts formed?
  A spread is the difference between the buy price or the ask and the sell price or the bid. The bid price is always slightly lower than the ask price. In the case of InstaFutures, a spread is formed by market participants as a natural difference between the best buy and sell offers. A spread exists because the buyers and the seller are not ready to give in to each other and do not insist on an immediate purchase or a sale. This is the rock-solid principle of trading on exchanges that will be true forever. InstaTrade does not charge any spread and does not interfere in its formation.

  Let’s figure out how a spread is formed.

  Imagine that one trader wants to buy 1 lot of EUR/USD InstaFutures at the price of 0.6525. For this, he sets a buy limit order at this level. This is how the bid price is formed, i.e. someone can make a sell deal with the size of up to 1 lot at this price. Another trader wants to sell 1 lot of EUR/USD InstaFutures but thinks that the price of 0.6525 is too high. So, he sets a sell limit order at 0.6550. This is how the ask price appears. In other words, someone can make a buy deal with the size of up to 1 lot. To sum up, the current market quote of InstaFutures is 0.6525/6550, so a spread equals 25 pips.
• What commission does InstaTrade charge for trading this instrument?
  A commission of 0.5% is charged from all trades of all participants in favor of the broker.
• Where are InstaFutures traded?
  This instrument can be traded on MetaTrader 4 (MT4) as well as on the special Gear.
• How can I estimate my would-be profits trading InstaFutures?
  Trading InstaFutures, you can earn as much as from trading any other financial instrument. You can buy or sell these contracts, albeit there are some specifics.

  The price of InstaFutures is determined by supply and demand. In the order book, one can look up current buy/sell orders.

  If a weekly candlestick closes above the opening price, buyers will gain a profit calculated as follows: (0.9999 – the price of opening a buy deal) * trade size in lots * 100. Sellers lose the same amount which was frozen in their accounts as a margin to secure a deal. Trading InstaFutures, remember that a margin amounts to 150% of the highest loss per deal.

  The special calculator is available for traders’ convenience.
• What is an order book and what should I do with it?
  All trades on an exchange are executed in an order book which displays ask and bid prices as well as a volume of an asset which a trader wants to buy/sell at that price.
• What is a limit order (pending order)?
  A limit order is a kind of order to buy or sell an asset at a specified price. If investors do not want to buy/sell an asset immediately at any price, they send a market order which will be executed only at the pre-set price. Market orders are not displayed in an order book.
• Why is a margin required to place limit orders?
  If a trader places a limit order, current limit orders freeze a margin in an account to enable their execution. This is done so that the order book is not clogged with fake orders, i.e. orders that cannot be actually fulfilled by a trader.

  The lot size is 100 futures contracts. The minimum contract is 0.01 lot without any swaps. A margin for buy trades is calculated in a special way, bearing in mind the highest risk.  For instance, opening a sell position at 0.2000, a trader is running a risk that InstaFutures will be closed at 0.9999 in case his forecast comes wrong. In other words, he will lose 100 * 0.1 * (0.9999 - 0.2000) ~ $8 per every 0.1 lot open. Therefore, to sell 0.1 lot at 0.2000, the margin will be $8.

  To reduce risks, the trading platform will require 150% of a margin size to open a position. In the example above, a trader will be required to provide the following margin: $8 * 150% = 12$.

  A basic margin for buy positions will be calculated as follows: 100 * trade size in lots * market quote.