Every experienced trader has heard or practiced crypto futures trading. It requires knowledge and much practice to succeed in futures trading.
Futures are agreements between parties deciding to purchase or sell digital coins at a pre-determined rate and on a specific day. So crypto futures are speculated on the digital assets rates.
How to futures trading:
- Suppose you are sure that an asset’s rate will go up, so you set the price and the date when you buy it.
- When that day comes, and the asset’s price has increased, as you thought, you make a profit.
The reverse situation is when you “go short”, which means you predict the price decline. You receive a profit if your forecast is correct and the rate really falls.
Thus, crypto futures trading allows making money on both upward and downward price changes.
Futures allow receiving gains without buying an asset directly but by making a contract on buying them in the future. It is a good option for those with no large savings but who want to multiply their investment portfolio.
Main Parts For You To Know
The date when a contract expires – the day when the parties have to settlement agreements. Traders have the right to sell their contracts to others, and it will not affect the contract in any way.
Leverage. Crypto platforms allow users to pick leverage for their futures contracts. Different exchanges allow for different sizes of leverage. It may be X10, X20, or X100.
Many credible crypto services allow futures trading, and here are the most popular:
The WhiteBIT platform offers perpetual futures contracts. It means a trader may keep his contract open as long as he wishes and then either resell it to someone else or settle it. In this case, a trader pays margin payments to another party.
Such contracts are backed by a special funding mechanism that allows for keeping the asset rate closer to the current market rate. Perpetual futures imply that the parties pay each other a fee, which size depends on the price difference from the spot market rate.
If the asset’s market rate drops lower than the perpetual futures price, a trader who expected the rate to increase has to pay a trader who expected the downward pride movement. And vice versa, if the asset’s rate is higher than the contract, a trader who guessed this price trend receives payment from another party.
You may practice this type of trading on a demo account on the WhiteBIT platform.