Bybit Discount Buy: Unlocking Lower Prices in a Stable Market
The allure of cryptocurrency trading lies not just in its potential for high returns, but also in the continuous innovation that shapes its landscape. A key aspect of this dynamic market is the pursuit of strategies that enable traders to maximize their investments, particularly in stable market conditions. In such scenarios, the ability to purchase digital assets at lower prices becomes a significant advantage. This is where Bybit's Discount Buy feature comes into play, offering a unique solution for investors looking to capitalize on market stability. In this article, we’ll explore Discount Buy’s functionality, benefits and suitability for different investor profiles.
Key Takeaways:
Bybit’s Discount Buy is a non-principal protected product designed for low-volatility markets, allowing clients to acquire BTC and ETH at prices lower than the market rate at the settlement date.
Discount Buy is particularly beneficial when BTC/ETH implied volatility is high but expected to decrease.
What Is Discount Buy?
Discount Buy is a non-principal protected product from Bybit designed for low-volatility markets, allowing clients to acquire BTC and ETH at prices lower than the market rate at the settlement date. This feature is particularly beneficial when BTC/ETH implied volatility is high but expected to decrease.
How Does Discount Buy Work?
Discount Buy operates on a unique mechanism whereby users can purchase a specific asset at a predetermined price on the settlement date, which is below the market rate at the time of order placement. This is particularly advantageous when the Settlement Price falls between the Knockout Price and Purchase Price.
Understanding Key Terms
Settlement Price: The price of the target asset at the time of settlement
Knockout Price: A price determined by a built-in mechanism to decide whether the user will buy the desired coin or receive a payoff
Purchase Price: The price at which users purchase the desired asset on the settlement date, provided the Settlement Price falls below the Knockout Price
Additional APR: In the Knockout Scenario, users receive their principal with an additional APR on top of it (in USDT) as a final payoff
Bybit’s Discount Buy is structured to function optimally in specific market scenarios as follows:
Knockout Scenario
- Condition: Settlement Price is equal to or greater than the Knockout Price
Outcome: Investors receive their principal plus an additional APR in USDT, which is profitable
Buy Scenarios
Condition: Purchase Price is less than the Settlement Price, which is less than the Knockout Price
Outcome: Investors buy the desired coins at the Purchase Price, leading to a profitable situation
Condition: Settlement Price is equal to or less than the Purchase Price
Outcome: Investors still buy the desired coins at the Purchase Price, though this may not be profitable
Benefits of Using Bybit’s Discount Buy
There are several advantages to using Discount Buy. Following are three of its key benefits.
Opportunity for Lower Purchase Prices
Discount Buy offers the unique advantage of acquiring cryptocurrencies at prices potentially lower than the current market rate. This is particularly beneficial in bear markets or periods of low volatility, where the chances of the Settlement Price falling within the favorable range (between the Knockout and Purchase Prices) are higher.
Structured Investment Strategy
The product's structured nature, akin to a knockout option, provides a cap on the price level in the holder’s favor. However, unlike traditional knockout options, a Discount Buy plan won’t expire worthless, as users have the option to buy the desired coin at a price lower than the market price at the time of order placement.
Potential for Additional Returns
In the Knockout Scenario, where the Settlement Price exceeds the Knockout Price, users not only get their principal back but also earn an additional APR, enhancing the overall profitability of their investment.
Risks of Using Discount Buy
While Discount Buy offers several benefits, it also comes with inherent risks. Below are three key risks associated with this investment product.
Market Volatility and Price Fluctuations
Despite the Purchase Price potentially being below the market price at the time of order placement, it might still be higher than the Settlement Price. In such scenarios, the settlement continues at the Purchase Price, which could result in a loss for the trader. This highlights the inherent risk that market volatility and price fluctuations may affect the investment outcome.
Non-Principal Guaranteed Nature
The non-principal guaranteed nature of Discount Buy means that invested capital is at risk. If the Settlement Price reaches or exceeds the Knockout Price, the trader receives the initial investment plus the Knockout coupon payment. However, if the market moves unfavorably, the principal amount could be at risk. This makes it crucial for investors to assess their risk tolerance before participating.
Suitability for Specific Investor Profiles
Bybit’s Discount Buy is designed for users who are looking to increase their crypto holdings in bear markets, or when market volatility is low. It requires a nuanced understanding of market trends and the ability to predict the movement of the Settlement Price within the specified range. This makes it more suitable for experienced traders, or for those with a higher risk tolerance.
How to Use Discount Buy
Now that you're familiar with the essentials of Bybit’s Discount Buy, let's delve into a comprehensive guide on how to begin using it. Before proceeding with Discount Buy, ensure you have an active Bybit account. If you haven't set one up yet, sign up for a Bybit account and refer to our registration guide for more details.
Subscribe to a Discount Buy Plan
Step 1: Log in to your Bybit account and hover your cursor over the Finance tab on the navigation bar at the top of the page. Then, hover over Earn and click on Bybit Structured Products.
Step 2: Click on Discount Buy.
Step 3: Scroll down under All Product Plans to explore available plans based on Coin, Purchase Price, Knockout Price and Knockout APR. Click on the Buy Now button of the corresponding plan that you’d like to select.
Step 4: Input your investment amount and ensure that you acknowledge all the parameters you’ve chosen. Once acknowledged, click on Buy Now.
Step 5: Please ensure that you’re aware of the following:
Once successfully subscribed, you cannot modify or cancel your order.
Click on Confirm.
Once you’ve clicked on Confirm, you’ve successfully subscribed to the plan.
View Your Orders
If you’d like to view the details of your Discount Buy orders, simply click on View Order in the successful order notification pop-up window.
Alternatively, you can follow the steps below if the pop-up window has disappeared.
Step 1: Hover your cursor over the Assets button on the top right corner of the homepage and click on Earn.
Step 2: Click on the Discount Buy tab to view your existing orders.
Whom Is Discount Buy Best Suited For?
Discount Buy is particularly suitable for:
High net worth individuals (HNWI) looking to accumulate BTC or ETH
Clients who anticipate the Settlement Price will fall between the Knockout and Purchase Prices, thus enabling them to make a profit
Should You Use Discount Buy?
Whether or not to use Discount Buy depends upon individual trading strategies and market understanding. It's an attractive option for those looking to capitalize on lower prices during stable market conditions. However, it requires a good grasp of market trends and risk management. Traders should evaluate their investment goals and risk tolerance before deciding to use this feature.
The Bottom Line
Bybit’s Discount Buy presents an intriguing opportunity for cryptocurrency traders, offering assets at below-market prices under certain conditions. While it has benefits such as cost savings, it also carries risks associated with market volatility. As with any trading tool, it's essential to use Discount Buy judiciously, in accordance with one's particular trading strategy and risk appetite.
Disclaimer: All trading carries risk. Only risk capital you can afford to lose.
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