Dual Currency Investment is a sophisticated financial product offered by the OKX exchange that utilizes options contracts to generate potential returns. It is a non-principal guaranteed, high-yield investment tool where Annual Percentage Yield (APY) can sometimes exceed 100%. This product allows you to set a specific date and a target price for a chosen cryptocurrency.
If the market price does not fall below your set target price by the expiration date, your funds are not used to purchase the asset, and you earn a yield. If the price does drop below your target, your funds are used to buy the cryptocurrency at that predetermined price, and you still receive an additional reward. Essentially, it allows you to earn a return regardless of market direction, acting as a small-scale investment if not triggered or a purchasing tool with a bonus if it is.
This makes it a relatively hands-off product suitable for those looking to earn on their crypto holdings with what is often perceived as managed risk.
How to Purchase a Dual Currency Investment Product
To get started, you will first need an account with the OKX exchange.
- Account Registration: Sign up for an account on the OKX platform.
- Navigation: Once logged in, navigate to the 'Finance' section on the OKX website or mobile app and select 'Dual Currency Investment'.
- Choose Your Investment Currency: The product currently supports using BTC, ETH, or USDT as the investment currency, with plans to add more options in the future.
Select Product Type:
- Earn Cryptocurrency: This is for users investing BTC or ETH. You set a target price above the current market price. If the price fails to rise to your target by expiry, you earn more BTC/ETH. If it does reach the target, your crypto is sold at that price, and you earn extra USDT.
- Buy the Dip (Cryptocurrency): This is for users investing USDT. You set a target price below the current market price. If the price stays above your target, you earn more USDT. If it falls to your target, your USDT is used to buy the crypto at that price, and you earn an extra reward.
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Key Considerations and Risk Management
Successful participation requires careful planning. Your strategy should be dictated by your primary investment goal.
- Goal: Hold and Earn Crypto - If your main objective is to accumulate more of your chosen cryptocurrency (e.g., BTC or ETH), it is advisable to select a target price that is significantly far from the current spot price. This reduces the likelihood of your coins being sold (converted into USDT).
- Goal: Execute a Buy or Sell Order - If your intention is to buy at a lower price or sell at a higher price, you should choose a target price closer to the current market rate. This increases the chance of the trade being executed, and these products typically offer higher interest rates.
Settlement Time: Returns from matured products are generally credited to your account by 18:00 (Hong Kong Time) on the expiry date.
It is crucial to remember that Dual Currency Investment is a non-principal protected product. Neither your initial investment nor your potential returns are guaranteed. The yield is generated through complex operations in the options market, which inherently carries risks due to market volatility. It is essential to fully understand the mechanics of this product and assess your personal risk tolerance before investing.
Frequently Asked Questions
What is the main advantage of a Dual Currency Investment?
The primary advantage is the ability to earn a high potential yield regardless of which direction the market moves. You either earn extra crypto or stablecoins if the price doesn't hit your target, or you execute a desired trade at your predefined price while still earning a bonus.
Is my initial investment safe?
No, Dual Currency Investments are non-principal guaranteed products. While the structure aims to provide a return in various scenarios, market conditions could lead to a loss of principal, especially if the asset price moves violently against your position.
How is the annual yield (APY) calculated?
The APY is a projection of the earnings you would receive over a year based on the fixed return for the specific duration of your investment term. It is important to note that this is a projected rate and not a compounded guarantee.
Can I exit my Dual Currency Investment before the expiration date?
Typically, these products are designed to be held until maturity. Early redemption is usually not a standard feature, so you should be prepared to commit your funds for the entire duration of the term you select.
Who is this product best suited for?
This is an advanced investment product best suited for experienced traders and investors who understand options and cryptocurrency volatility. It is ideal for those with a specific price target in mind for buying or selling.
What are the tax implications of using this product?
Tax treatment varies significantly by jurisdiction. Earning interest or executing trades through this product may be considered a taxable event. It is highly recommended to consult with a tax professional to understand your obligations.