In crypto futures, there is no involvement of the crypto assets as all contracts are cash-settled. You need to have a trading plan, risk management strategy, and understanding of the functioning of the derivatives market. Trading in crypto futures is very different from trading in the spot market. For example, if an investor has huge Bitcoin exposure, he will take a short position in the bitcoin futures to limit his downside risks.īyBit Offer: Get upto $2000 Bonus on your First Deposit using this link to sign up. Therefore, trading crypto futures help you to amplify your profits by multiple times with the same trading capital compared to trading on the spot market.įor institutional investors, crypto futures help hedge their position in the spot market and minimize the risk of losses. If you’ve used the leverage of 50X for a total 500 BTC futures contract, your profit would’ve been $30,400 on a trading capital of $5,000. Therefore, based on the analysis, you initiate a long position and buy 10 BTC futures contracts valued at $500 each.Īnd, every increase of $1,000 in BTC will result in the value of the bitcoin futures contracts increasing by 10%.Īt the settlement of the contract, the price of Bitcoin reached $35,000, and the value of each futures contract increased to $804, a total profit of $3,040 on an investment of $5,000. Suppose BTC is trading at around $30,000 level, and you expect the price to increase in the short term. Let’s understand it with an example of bitcoin futures trading: Using leverage allows you to significantly enhance the exposure and increase the profit percentage without putting funds upfront. What makes bitcoin futures trading attractive is due to involvement of leverage.
At the expiry, the parties settle the contract, and it closes. Therefore, if a market participant thinks that at the time of expiration of the contract, the price of assets will rise, then he/she will initiate a long position and vice versa. The contract tracks the underlying index or asset and its price changes as per the change in the digital asset price. It is a contract with an agreement to buy or sell the specific cryptocurrency at a future date on an agreed price. Unlike crypto spot trading, where you buy and sell digital assets such as Bitcoin and Ethereum for immediate delivery to have direct ownership, on the other hand, in crypto futures trading allows you to gain exposure to crypto assets without having to hold the underlying digital asset. Try Margex Now What is Crypto Futures Contracts Trading? It has the lowest fees structure among the top bitcoin exchanges and is divided into 10-levels, starting from 0.02% as maker fee and 0.04% as taker fee. Other exchange features include an industry-leading matching engine that can manage 100,000 TPS with a minimum latency of 5ms, deep liquidity with minimum slippage, a trading platform compatible with multiple devices, a secure asset fund, etc. You can trade futures with a maximum leverage of up to 125X. It offers to trade in USDT-margined perpetual and quarterly futures, COIN-M (token margined with or without expiry futures contract), BTC options, and leveraged tokens.
Best trading platform for futures professional#
The Binance futures account has become the preferred choice for professional traders and institutional investors. The gross daily trading volumes on the exchange are over $60 billion. It has set a benchmark in the market regarding product offering, trading volume, and leverage.īinance got into the futures market in early 2020, and in a short span, it has become the top platform to trade in crypto derivatives and has deep liquidity. Binance is the leading crypto spot exchange and is a preferred exchange for traders to buy bitcoin and other cryptocurrencies.
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