Futures trading is an old financial instrument used for different commodities such as gold, grain, solver, and oil. That is commodities whose price can be forecasted. Of course, it is not just betting on the future price. Futures trading involves an in-depth analysis of the commodity and the market. Only deep analysis allows for drawing forecasts for future price movements.
What are futures is crypto? Like other valuable commodities or assets, cryptocurrency prices can be predicted through research and investigation of the market. That may be why futures crypto trading is successful only for experienced traders.
How does Futures Trading Work for Crypto?
The process takes place on a crypto exchange. Two parties forecast the future price movement for a crypto coin. One of them goes long, which means he believes the price will increase, and then he will sell his holdings. Another party goes short, which means he forecasts the price drop.
They make a contract and indicate its expiration date and the asset’s price. When the day comes, they must settle their agreements. The party who was correct in his price forecast receives income.
Best Exchange for Futures Trading Crypto
Here are some crypto platforms enabling futures for crypto trading:
- WhiteBIT
- ByBit
- Kraken
- FTX.
WhiteBIT comes first because it is the best crypto futures exchange operating in Europe. The platform offers some popular crypto pairs for futures trading and constantly expands the list, adding more crypto assets.
The maximum leverage that can be used for futures trading on WhiteBIT is 20X. The platform offers perpetual futures contracts that have no expiration days. That is, parties don’t have to make settlements when the contract day comes. Instead, they payout each other depending on their positions and market fluctuations. Such contracts are funded from the exchange reserves.
Another reason why WhiteBIT is the best exchange for futures trading is the demo trading option. You can practice futures trading without using your own funds. Instead, you use demo tokens. You can practice using different leverage sizes and see how it works. Demo trading helps find all pitfalls you would miss when trading on the real markets.
