Bitcoin futures are traded on futures exchanges, which is either a traditional trading platform, a dedicated cryptocurrency exchange, or forex trading platform that has adopted offering futures contracts like Bitcoin futures Several exchanges have adopted Bitcoin futures. Bitcoin Futures Trading Next Level Trading with Cryptocurrency Futures Bitcoin and digital assets are volatile investments. Many traders attempt to manage their risk simply by buying an asset when the price drops or selling it when the price goes up. Dec 22, · In response to growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure, CME options on Bitcoin futures (BTC) are now trading. The value of options on Bitcoin futures is based on the regulated CME CF Bitcoin Reference Rate (BRR) and settles into actively traded Bitcoin futures.
Bitcoin trading contractsBitcoin Futures
That means the buyer can only get the Bitcoins from the seller when the predetermined agreed price is reached. That means the seller can only sell the Bitcoins to the buyer when the predetermined agreed price is reached. When you buy or go long a Bitcoin futures contract, you enter an agreement to receive the agreed amount of Bitcoin or the equivalent amount of money depending on the agreed contract settlement.
However, since most exchanges only allow cash settlements, Bitcoin wallets are not a necessity since the participants receive returns in terms of cash rather than the physical Bitcoins. Bitcoin futures are traded on futures exchanges, which is either a traditional trading platform, a dedicated cryptocurrency exchange, or forex trading platform that has adopted offering futures contracts like Bitcoin futures. Bitcoin futures present a perfect opportunity for investors for speculating future Bitcoin prices without the investors having to physically own the physical Bitcoin.
It offers daily, weekly and perpetual contracts. For you to invest in Bitcoin futures trading, you will need to register for an account with a Bitcoin futures exchange like BTCC. Then, you will need to deposit some money in fiat form into the account.
Once your account is funded, you are good to start trading Bitcoin futures. However, before choosing the type of contract to invest in; either a long buy or a short sell , you should do thorough research to correctly speculate the future market price movements.
If for example, you enter a long futures contract, you will make profit if the market price of Bitcoin rises and remains above your anticipated price the predetermined price at which you had specified in the contract by the expiration time. If the market price drops and fails to hit the predetermined market price by the time of the expiration of the contract, you end up making a loss. If on the other hand, you enter a short futures contract, you will make profit if the market price of Bitcoin drops and remains below your anticipated price the predetermined price at which you had specified in the contract by the expiration time.
If the market price rises and fails to hit the predetermined market price by the time of the expiration of the contract, you end up making a loss. However, several factors determine your profits or losses and they vary from one exchange to another. These include;. Bitcoin futures liquidation means closing a contract mostly when it is a loss. Different exchanges have different liquidation thresholds where your contract is automatically closed. This threshold is normally specified as the stop out ratio.
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