Huobi adds new functions to its derivative platform

  • Ali Raza
  • 19th March, 14:45
Huobi adds new functions to its derivative platform
  • Huobi Global's futures trading platform has just added several new features, with plans to introduce new functions and services in the future, as well.
  • One of the new additions is known as a partial liquidation mechanism, which will gradually reduce traders' positions.
  • The second major feature is a circuit breaker, that would let traders halt liquidations in case of major price movements such as the one that caused BTC price to drop by 50% last week.

Major cryptocurrency exchange, Huobi, has recently added a new feature to its futures trading platform, Huobi DM. The feature in question acts as a ‘partial’ liquidation mechanism that basically gradually reduces the traders’ positions, instead of instantly liquidating them at once.

In addition to that, the platform also added a circuit breaker function, that will allow traders to halt liquidation in case of unusual or particularly large price movements.

Huobi Group’s VP of global business, Ciara Sun, commented on the new additions by saying that the exchange felt that the new liquidation features would bring some far-reaching benefits. According to her, these benefits will be helpful for a wider crypto community simply by helping them minimize sudden price movements that occur due to abnormal liquidation events.

Such instances were seen only last week, when some major liquidations caused Bitcoin to crash and see its price drop by more than 50%. In fact, multiple market observers were even suggesting that a tool such as a circuit breaker could be useful, at the time.

Market observers want circuit breakers to be the industry’s standard function

While the new function did arrive late to prevent that incident, it is likely to help traders in the future, and prevent similar events from happening again.

Multicoin Capital’s managing partner, Tushar Jain, commented on the last week’s event by saying that the price moves in crypto space are a strong argument for introducing circuit breakers on an industry-wide basis. The crypto markets structurally broke, and exchanges need to find a way to prevent that from happening again, Jain said.

Ciara Sun added that the exchange’s partial liquidation mechanism would also be helpful when it comes to minimizing the downside, but it would also not negatively affect potential upside. Huobi DM also has plans to introduce perpetual swaps in the future, which would include BTC swaps with a massive 125x leverage. In addition to that, it is also looking into starting its own OTC loan service, as crypto loans are becoming one of the industry’s largest trends in 2020, and potentially beyond.

By Ali Raza
A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications. Raza is the co-founder of 5Gist.com, too, a site dedicated to educating people on 5G technology.
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