How Do Crypto Futures Work?

 WhiteBIT is the largest crypto platform in Europe that offers the full range of tools for trading such as smart staking, p2p, DEX, crypto futures, margin trading, etc. In this article, we will focus on how to trade crypto futures. This type of trading belongs to advanced financial instruments used by experienced investors. The essence

of crypto futures trading is “betting” on the future value of a digital asset. It requires in-depth research:

• Technical analysis: reading crypto charts, finding historical indicators, patterns, etc.

• Fundamental research: external factors that impact the crypto market - the global economy, crisis, inflation, etc.

• Quantitive analysis: based on the two mentioned types of research, investors calculate indicators that become a foundation for their further actions.

The WhiteBIT exchange provides all the needed information - crypto charts and the blog where users can learn more about the market from guides.

How Do Crypto Futures Work?

Crypto futures trading implies two options: a trader either opens a long position or a short one. Long means a trader plans to sell his holdings at a higher price in the future. A short position indicates a dropping market and buying crypto coins at a reduced rate. Futures contracts are made on the WhiteBIT exchange, where traders indicate the asset's price and the date when the agreement expires. 

The platform also offers perpetual futures contracts, meaning there is no end date. The financing of such agreements comes from the platform’s reserves. If the market moves in the opposite direction, a trader pays the penalty. Such contracts can last as long as a trader desires. Assets’ prices are linked to the spot market in this case. 

Traders can also use leverage in crypto futures trading. Leverage means borrowing funds from the exchange or from other users who agree to lend their crypto for interest. The size of leverage can be X5, X20, etc. The higher leverage a trader picks, the bigger risks one bears. To practise different leverages and crypto futures trading, you can register a demo account on WhiteBIT.