Could you please recommend the best place to do Bitcoin contract?
The most popular platform for futures and perpetual swap contracts is Bitmex. Other options include Deribit, Basefex, and Kumex. If you are in located in the US, you'll need VPN to connect to the larger exchanges like Bitmex and Deribit.
There is news report that for some exchange, if you do a contract, somebody else also do a contract and lose a lot of money, you have pay for their lose. I really don't understand this and believe this is a scam.
Socialized losses happen when high volatility causes forced liquidations that can't be absorbed by the market. Read here:
https://cointelegraph.com/news/-huobi-talks-about-lessons-learned-from-socialized-lossesBitmex employs an
auto-deleveraging system to prevent socializing losses in these cases. They basically close winning traders' positions to account for losing traders' liquidations when there is insufficient liquidity.
One way or another, the platforms claw back losses when their insurance funds can't cover them.
Also, if I do contract, I want to avoid the situation for sudden price change (for example, price drop 10% in 5 seconds and recover, in this case, people who long bitcoin may lose all money), a believe a simple algorithm such as moving average can avoid this.
The only way to avoid stop runs is to use lower leverage and set wide stops.