Bull Punter and Bear Punter are non-principal protected investment products that could potentially yield uncapped returns with a small price. As indicated by their names, Bull Punter and Bear Punter are directional products and should be your choice when you believe the BTC price will go up (bull) or down (bear) to a certain point. If the market turns out to be consistent with your judgment, you will be able to realize potentially unlimited returns with the small premium you pay. If the market does not go as expected, all you will lose is the premium.
If you believe BTC price is poised to go up over a period of time, Bull Punter should be your choice. By expiry, if the BTC price surges higher than the Linked Price, you will receive return in BTC based on the Settlement Rules; if the BTC price has not risen to the Linked Price, l you will not receive any return. That being said, with Bull Punter, your maximum loss would only be the premiums you pay, while your potential return could be unlimited. It is similar to buying BTC at the spot market in that you make profits as the price goes up. What makes it different is that you could enjoy the multiplied return brought by the leverage effect without having to worry about maintaining your margin - a trouble inevitable when investing in other leveraged products such as future contracts.
Settlement Rules:
Upon expiry,
If Settlement Price > Linked Price: Settlement Amount = Shares*(1-Linked Price/Settlement Price)
If Settlement Price ≦ Linked Price: No settlement
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Expiry Date
Expiry Date is the date when your investment products are settled. Your return from this product will also be automatically credited into your account on this day.
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Linked Price
Linked Price here is a benchmark price. Upon the expiry of the product, the Settlement Price will be compared against this benchmark price to determine whether you will receive settlement.
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Premium
Bull Punter is offered in shares and a premium is charged on a per-share basis. You could decide the number of shares you want to buy. The total premiums you pay and the settlement you receive will be based on the number of shares you end up purchasing. The premium is non-refundable.
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Settlement Price
Settlement Price is the average of the Settlement Index over the last 30 minutes before 16:00 (UTC+8) on the Expiry Date.
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Settlement Index
Settlement Index is derived from 7 leading BTC-USD exchanges, includingBitstamp, Bittrex, Coinbase Pro, Gemini, Itbit, Kraken and LMAX Digital.
Let's take a look at how a Bull Punter product works:
Here we have a Bull Punter product with the parameters as follows:
- Linked Price：10,000
- Expiry Date：27-Mar-2020
- Premium per Share：0.01BTC
On 28-Feb-2020, Alice bought 1 share of the above product.
On 27-Mar-2020,
- If the BTC Settlement Price goes higher than the Linked Price and ends up at 12,000 USD, Alice will receive BTC in return. The amount of the BTC she will receive should be 1 share*(1-10,000/12,000) = 0.1667 BTC.
- If the BTC Settlement Price is 8,000 USD, which is lower than the Linked Price 10,000 USD, Alice will get no settlement.
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What is the prerequisite to purchase Bull Punter Product?There is no prerequisite on your Identity Verification level to buy this product. However, we do suggest that you carefully review the product specifications. You will also be asked to take a quick quiz before making the first investment to ensure that you have fully understood rules.
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What is the minimum and maximum purchase limit?The minimum purchase limit is 0.1 share (the premium per share varies depending on the different Linked Price and tenors). There is no maximum limit for investors as long as there is quota left for the product.
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Can I revoke the investment before the Expiry Date?It is irrevocable after the purchase is successful. You will hold the product till the Expiry Date.
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Can I redeem the investment early before Expiry Date?No early redemption is allowed. It will be settled on the Expiry Date by 16:30 UTC+8.
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When can I get my settlement and how?You will get the settlement upon expiry as long as the Settlement Price is higher than the Linked Price, as set out in the Settlement Rules. If that is the case, the settlement amount will be credited into your wallet by 16:30 UTC+8 on the Expiry Date automatically, and there is no need for manual redemption.