Difference Between Spot and Futures Trading
Spot and futures trading are completely different and it is important for traders to be able to differentiate between the two. Cryptocurrency derivative market has becoming hot in 2020. According to the research published by TokenInsight, the derivative trading volume increased by 314% from the 2019 four quarters’ average, with $62.5 billion being the highest daily trading volume.
Futures Trading in Cryptocurrency
Unlike spot trading, trading contracts do not require you to own the underlying asset. The principle of trading contracts is that you get benefit from the price movement of the underlying asset based on your prediction on the price of that asset either going up or down.
In the futures market, traders buy or sell contracts for delivery on a specified date in the future. For trading futures at BTCC, the exchange offers perpetual, weekly and daily contracts to suit different needs of traders.
To open a position for futures contracts, trader need to fulfil the initial margin. For example, the current required initial margin for BTC/USDT 100x is 100 USDT/lot. If Peter has 2000 USDT in his account, he can use 500 USDT to trade 5 lot of BTC/USDT 100x. The remaining 1500 USDT in his account will be the free margin, which mean Peter can use the remaining asset to open more positions.
“How to Trade Futures Contracts?”
You could make profits by placing a long or short order according to your prediction. The existence of futures adds a short-selling mechanism to the market.
For example,
If BTC is 10,000 U.S. dollars now, and you predict the price will fall. Choose the corresponding leverage and open short. When the price drops to a certain price, you can make a profit. It is the same with opening a long position. When contract trading increases the leverage by 10 times, the profits and risks will also increase.
BTCC offer maximum of 150x leverage with daily contract support both BTC and ETH. The perpetual contracts at BTCC support total of 9 major cryptocurrencies. With BTC/USDT perpetual contract offer 10x, 20x, 50x and 100x leverage, and minimum order is 0.01 lot.
BTCC offer 9 major cryptocurrencies, and offering 16 trading pairs with maximum of 150x leverage.
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Disclaimer: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
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