Futures has appeared more than a century ago when people speculated on the future price of the commodity of asset and made a profit from it. With the emergence and development of the crypto market, futures appeared in it too.
What are futures in crypto? Crypto futures allow generating income by forecasting the future asset’s rate without the necessity to hold the asset actually. That is the same speculation on the price of digital assets.
What does futures trading look like? You make a derivative contract with another party. To put it simply, this contract includes the price of the asset and the date of expiration. When that day comes, you see how your settled price differs from the current rate. And depending on the result you receive assets or you lose.
There is also a peculiarity – you place the position for long or for short. “Long” position means you expect the value to grow, while “short” means you think the asset’s rate will drop. If you guess the direction of the price movement right – you generate profit.
Thus, futures trading allows making a profit not only on an upward trend (“bull”) in the market, but also when the market drops (“bear” market).
That is the main difference between futures trading and simple spot trading, which is efficient in the “bull” market (when the rates go up).
Where Can I Trade Bitcoin Futures?
If you want to try futures trading we recommend using the most popular crypto assets such as Bitcoin, Ethereum, etc. The thing is, the more stable and credible the project is – the easier it is to forecast its price movements. Bitcoin has got the reputation of being the most stable growing crypto asset.
Next, you should pick a credible exchange for futures trading. It can be:
- WhiteBIT
- Binance Futures
- ByBit
- Deribit
On each of these platforms, you will find a futures calculator, which will help you to calculate your income. There you should enter the leverage you want to use and the price you fix for the moment in the future when the deal must be fulfilled. It will help you understand your potential profit or loss.
