Jan 30, · Bitcoin futures allow investors to gain exposure to Bitcoin without having to hold the underlying cryptocurrency. Like a futures contract for a commodity or stock index, Bitcoin futures . Bitcoin futures enable traders to get exposure to digital assets like Bitcoin without having to physically (or digitally in this instance) hold the underlying asset. Bitcoin Futures operate like a standard futures contract for a stock, commodity, bond or index and allow Bitcoin futures traders to speculate on the future price of Bitcoin. May 07, · Averaging more than $5 Billion in daily trading volume, futures are one of the most liquid instruments to trade Bitcoin. Popular Bitcoin futures exchanges like Bitmex, Deribit, and FTX enable its users to long or short BTC with up to x leverage.
Bitcoin futures tradeHow To Invest In Bitcoin Futures
In another scenario, if you expect the prices of Bitcoin will fall, then you will buy a put option. A put option enables you to sell Bitcoin in the future at a price that is higher than the future price you expect. Using long is quite straightforward where you buy the asset with the only difference being that it enables you to have more leverage.
There is an expiration date for both the call and put options. Between these 6 months, you can sell the Bitcoin at any time. January 1, , then using the call option is quite worthless. When such situations appear, then two things can happen:. Hence, if the price of Bitcoin is falling before the expiration date, the options become worthless. What is the Marubozu candlestick? To process this transaction, you choose an exchange like CME.
The CME exchange will compensate your contract partner for this. They will take the difference which is USD from your so-called margin account and give it to Mark. This kind of settlement is performed on the expiration date of the futures contract as well as every day of trading based on the current price of Bitcoin. In order to ensure that you have money in your margin account, you should put up an initial margin at the beginning of the contract.
The minimum margin is also defined by the broker. If your money in the margin account falls from your initial margin to the maintenance margin or minimum margin, then the exchange triggers a margin call where the broker requests you to fill your margin account to the initial margin.
If you are unable to fill the margin account even after the margin call, then the broker has the right to sell your Bitcoins at a price that is more unfavorable than waiting for a good opportunity. So, it is better to avoid margin calls. So, Bitcoin Futures trading can be done on various places which include:. While you know how to trade Bitcoin Futures, it is also necessary to understand where to trade them. You should find a trustworthy exchange which offers good security and an easy to use interface.
So, it is better to do proper research before you choose an exchange platform to begin trading. Several platforms, financial institutions, and various cryptocurrency exchanges have signaled to launch Bitcoin Futures on their platform. Spot trading—the practice of buying and selling Bitcoin —forces traders to exchange cryptocurrencies at their current prices. There is! A futures contract is an agreement between two traders that obligates a trader to buy or sell an asset at a specific time, quantity and price.
You could also be on the other side of the deal, agreeing to selling a Bitcoin for a fixed price. On Bakkt , the Bitcoin futures platform operated by the Intercontinental Exchange, about 11, futures contracts are traded each day. Futures contracts originated with 17th-century Japanese samurai , who were paid in rice but were out most of the year doing whatever it is that 17th-century samurai do.
But they wanted to ensure that the rice they were paid in, say, February held its value until August, so they traded contracts that obliged the signee to pay out the equivalent amount of rice in August, regardless of its current value. Some crypto exchanges, such as OKEx , have lower trading fees for futures contracts, which means that traders can squeeze a bit more out of their accounts by using futures. Instead, they are traded like other assets. As the trading value of Bitcoin varies, so too will the value of different Bitcoin futures contracts.
When entering a futures contract, there are three ways a trader can exit their position: offsetting, rollovers and expiry. Offsetting is the most common, and occurs when a trader creates another futures contract with an equal value and size, making their effective obligations zero as they balance out.
Rolling over is done by offsetting a position, but with an expiry date that is further into the future. Another trading method for futures is hedging.
Hedging is a way to reduce risk, which is useful for traders dealing with the volatility of cryptocurrencies. Dashboard Dashboard. Tools Tools Tools. Featured Portfolios Van Meerten Portfolio. Market: Market:. Currencies Menu. Bitcoin Futures. Fri, Dec 25th, Help. Full Chart. Cryptocurrency Futures Prices. Main View Technical Performance Custom. Futures Exchange Comparison. Bitcoin Bakkt DNF Cryptocurrency Market Capitalizations Full List. Crypto Digital Solutions. See More. Log In Sign Up.
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