What is the Best Place to Trade Futures for Crypto?

Futures trading is a way to generate income from speculation on asset prices. An underlying asset for futures derivatives may be any type of goods. For instance, futures on precious metals, oil, gas, etc., are widespread. Cryptocurrencies are also often used for this type of trading. Let’s find out how to trade crypto futures and what is the best place for it.

What is Crypto Futures Trading?

In futures trading, you do not necessarily buy cryptocurrency, but you buy contacts on purchasing or selling crypto in the future. The idea of futures trading crypto is speculation and risk hedging:

  • If an investor has some number of crypto coins and fears losing them because thinking the market will drop soon, one may sell his coins and then repurchase them at a lower rate through futures contracts. 
  • If an investor awaits market growth and wants to earn from it, one may sell his coins at a higher price.

In both cases, futures imply entering into an agreement where investors should indicate the date and the price for the deal. 

In futures contracts, people often use leverage. That means investors borrow funds from a crypto platform to make their position more profitable. Simply put, you have 50 dollars worth of Ethereum, but you want to open the position on 100 dollars. So you may use the 1:2 leverage ratio, and your $50 will turn $100. Respectively, you will make twice higher returns. Leverage works if your price expectations match reality. If the market moves in the opposite direction to what you expect, your position can be liquidated. The bigger leverage you use, the more chances of liquidation. So it is advisable to use the smallest leverage ratio for a start.

What is the Best Place to Trade?

The WhiteBIT crypto exchange is the best option to trade futures. It offers up to 20X leverage and perpetual futures contracts with no end date. So your positions may last as long as you wish, while the financing comes from the WhiteBIT funding mechanisms. Depending on where the market moves, you will have to pay or receive fees and maintain your positions opened. 

You may also try different leverage ratios on a demo account. It will help you assess risks and determine your trading personality.

Leave a Comment