What are Futures Trading and Why Should I Try It?
Crypto futures trading is a profitable way to invest in the crypto market, as it allows people to purchase contracts that estimate what an asset’s price will be at some point down the line. As opposed to classical trading practices where commodities are bought and sold, crypto futures require buyers to purchase assets at a pre-set rate by a certain date. By engaging in this type of speculation with crypto, investors can increase their profitability while also protecting themselves from losses due to any sudden fluctuations in price.
For instance, a speculator may purchase a futures agreement on a trade cryptocurrency exchange that outlines the cost of BTC at some point in time. If the value appreciates by then, they will benefit from their gain margin. But if it depreciates instead, they’ll suffer a loss.
Futures are a great way for traders to make educated guesses on the potential future rates of assets, even if they do not own them. By taking long or short positions, investors can take advantage of both bullish and bearish markets to potentially get higher profits. Additionally, leveraging allows users to trade with more money than what’s in their account – this increases the risk but can also lead to bigger rewards.
Benefits of Crypto Futures Trading
Here are the reasons why you should try trade futures crypto:
- Futures has distinct advantages, with one of the most advantageous being that it allows investors to hedge their investments. By going short, they can safeguard themselves from potential losses resulting from fluctuations in price across other crypto assets.
- Allows magnifying traders’ positions, which means they can trade using funds bigger than what is available in their accounts. This opens up larger opportunities for profits but also amplifies the potential risks involved.
- Gives traders unprecedented access to a wider range of markets unavailable through spot trading, enabling them to make money on price changes across multiple markets.
- A key benefit of futures is that it usually has lower transaction costs as compared to spot trading, thus potentially resulting in increased profits for investors.
- Offers the unique chance to benefit from price fluctuations without having to own and store any digital assets. This allows speculators to profit from market movement while avoiding risks associated with purchasing and holding cryptos.
- It is much simpler for traders to enter and exit positions due to its increased liquidity compared to spot markets.
Futures trading can be hugely beneficial to investors with its numerous benefits, such as hedging and leverage options, access to a wide array of markets, lower costs without needing possession of the asset itself, and liquid assets. Feel free to try this tool on the WhiteBIT platform. It supports futures on all popular coins including BTC futures and provides robust security for traders.