Bitcoin is a digital currency, also known as a cryptocurrency, and is created or mined when people solve complex math puzzles online. Recently, bitcoin futures trading is getting more popular. Let’s find out more:
What is Bitcoin Futures?
A Perpetual Contract is a derivative product that is similar to a traditional Futures Contract. An agreement to buy or sell a commodity at a predetermined price at a specified time in the future. But with one main difference: contrary to Futures, Perpetual Contracts do not have an expiry. So you can hold a position for as long as you like. In addition, perpetual contracts mimic the margin-based spot market and hence trade close to the Index Price. This allows you to amplify the outcome of the deal but it also means that a decrease in the price of a commodity equals to your initial margin. The percentage of the total Funds you provided as collateral will automatically liquidate your equity and close your position. In few words, features is that exist or happen at a later time.
How to trade them?
Let’s understand the context first, for example. Two parties people agree on a deal and that will happen in a later on time. In this case 100 lbs of brown sugar for $1 for per pound. So the sugar company producer, will agree on this deal and start producing the products based on those agreements. To keep in mind, the deal was made on July 4th and the transaction will take place on November 4th of the same year. So, this was an agreement to buy or sell some commodity on a given date for a given price. From this, we can say that the best way to trade futures, it is to manage the unknown and predict futures market changes. In the case of the financial futures, which are literally piece of papers like currency.
Where can I trade BTC futures?
There are many cryptocurrency trading platforms, however not many do trading futures. One of the recent new player in the market is Phemex. Although Phemex is a newbie on the market, it is already the fastest cryptocurrency derivatives exchange on the market. This new exchange is a professional and trustworthy global cryptocurrency derivatives platform. Phemex offers Bitcoin, Ethereum, Ripple, Litecoin, and EOS perpetual contracts, with up to 100x leverage.
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