Before proceeding, it would be best if you read these two articles to get a better understanding of inverse futures contracts:

Trading on the spot means trading a non-derivative pair like BTC/USD on a regular exchange (Bitstamp, Coinbase, et cetera). You exchange your dollars or euros or another fiat for bitcoins directly, and it gets credited to your account immediately once the trade is executed, no need to wait for the settlement date like with a futures contracts.

There are some differences between trading on spot and trading an inverse futures contracts, to better understand it let’s take a look at the following examples (we will neglect the fees and use of leverage for the simplicity of understanding the concept).

Suppose you buy one BTC at the price of \$7,500, and the price goes to \$10,000, and you sell. You gained \$2,500 profit (\$2,500 worth of BTC at \$10,000 is 0.25 BTC).

Now let’s do the same at okex.com futures market (well almost the same, as it’s not a spot exchange). You have one BTC at your account, and you go long 75 contracts at \$7,500 (one contract is \$100), and since you went long on BTC, you’re, essentially, went short on USD/BTC pair (inverted BTC/USD). Your entry price in BTC on this USD short will be 0.01333 (one contract is 1/75 of BTC at \$7,500, hence it’s worth 1/75 = 0.01333 BTC). The price of BTC goes to \$10,000, and now one \$100 contract in terms of BTC is worth \$100/\$10,000 or 0.01, and you exit your position. Your gain here will be 0.01333 – 0.01 = ~0.00333 on each contract. Holding 75 contracts makes your total gain ~0.24975 BTC (0.00333*75 = ~0.24975) or ~\$2,500 at the price of BTC at \$10,000 (almost exactly 0.25 BTC, 1/75 gives you infinite 0.013333…, so there’s a little error).

Here comes the trick. It seems like you gained the same amount in both cases, about 0.25 BTC, but remember, the one bitcoin you used to go long 75 contracts at \$7,500 is now worth \$10,000. So in total, your gain in USD would be \$5,000 (\$2,500 from 0.25 BTC gained trading and \$2,500 from one bitcoin you held at your account to buy 75 contracts).

If the price moved against you on okex.com, your losses in fiat would be higher too, since the bitcoins you used to open contracts are now worth fewer dollars, and you’re also losing BTC directly on your contracts because the market is going against you.

Now let’s conduct the same experiment but with shorting and compare it to shorting the regular spot market (we will not talk about funding and trading fees to simplify the example).

You sell one BTC short at \$10,000, and the price goes to \$7,500, you repurchase it and realise a profit of \$2,500, nice and neat.