Dual investment
Also called: dual currency investment · dual asset
Definition
Dual investment is a structured exchange product where you earn a fixed yield but may be paid back in a different coin depending on whether the price ends above or below a target price on settlement.
How dual investment works
You choose a coin such as BTC, a target price and a settlement date. In a buy low product, you deposit stablecoins; if the price at settlement is at or below the target, you receive BTC bought at the target price, otherwise you get your stablecoins back. In a sell high product, you deposit BTC; if the price ends at or above the target, you receive stablecoins, otherwise your BTC. You earn the yield in either case.
Under the hood, it works much like selling an option. The high yield is your compensation for giving up the upside or accepting the downside. If BTC crashes far below your buy low target, you still receive BTC at the target price, which is then worth less.
Funds are locked until settlement, usually with no early exit. The settlement price is typically an index average at a set time, so it can differ from the last trade you see. Terms, coins and yields vary by exchange.
Example
Suppose BTC trades at 62,000 USDT and you deposit 6,000 USDT in a 7-day buy low product with a 60,000 target and 20% annualised yield. Interest for 7 days is 6,000 times 0.20 times 7 divided by 365, about 23 USDT. If BTC settles at 61,000, you receive 6,023 USDT. If it settles at 55,000, you receive 6,023 divided by 60,000, about 0.1004 BTC, worth about 5,522 USDT at that moment.
Common mistakes
- Treating the high annualised yield as risk-free interest.
- Choosing a buy low target on a coin you do not actually want to own.
- Forgetting that a sell high product caps your gain if the price rallies far above the target.
FAQ
Can you lose money with dual investment?
Yes, in value terms. You always get the yield, but you may be paid in a coin that is worth less than what you deposited, or miss gains above your target.
Is dual investment the same as options trading?
It is built on similar mechanics to selling an option, packaged as a simple product. You do not manage the option yourself.