On BitMEX, the GNO derivative is in the form of a Futures Contract and allows traders to speculate on the future value of the Gnosis / Bitcoin (GNO/XBT) exchange rate. Traders need not have Gnosis to trade the futures contract as it only requires Bitcoin as margin.
The GNO futures’ underlying is the GNO/XBT exchange rate on Poloniex as recorded in the .GNOXBT Index. The futures are quoted in Bitcoin and all margin and PNL calculations are denominated in Bitcoin.
|XBT Contract Value||Multiplier * Futures Price * 1 GNO|
|USD Contract Value||XBT Contract Value * XBTUSD|
|PnL Calculation||# Contracts * Multiplier * (Exit Price - Entry Price)|
Traders who think that the price of GNO will rise will buy the futures contract. Conversely, traders who believe the price will drop will sell the futures contract.
All margin is posted in Bitcoin, that means traders can go long or short this contract using only Bitcoin. The GNO futures contracts feature a leverage of up to 5x.
For example, to buy 10 Bitcoin worth of contracts, you will only require 2 Bitcoin of Initial Margin.
The GNO futures contracts settle on the .GNOXBT30M Index Price. Settlement occurs on the settlement date at 12:00 UTC.
A trader wants to goes long 10 XBT of GNO futures contracts. GNOM17 (the quarterly GNO futures contract) trades at 0.0500 XBT. As the leverage is 5x, the trader only needs 2 XBT of margin for this trade.
The trader must buy 200 contracts: 10 XBT / (0.0500 XBT * 1).
A few days later, the price rises to 0.0600 XBT and the trader sells all their contracts.
The trader’s profit will be: 200 * 1 * (0.0600 - 0.0500) = 2 XBT