Cryptocurrency Futures Defined: How Bitget Is Leading the Way
Cryptocurrency and blockchain technology have always been playing the disruptor role over the past decade, especially in the finance sector. With their groundbreaking solutions to trust and immutability, they have brought forth a myriad of novel products with unprecedented efficiency and convenience. One such example is cryptocurrency derivatives, whose trading has become increasingly popular due to the high volatility of many cryptocurrencies.
Introduction to derivative trading
As its name suggests, a derivative is a type of financial contract whose value derives from its underlying asset(s) or index. Its price is often determined by fluctuations in the underlying. Derivatives can be extremely powerful in the hands of experienced traders, providing essential ammunition for risk hedging and seeking.
In the traditional finance sector, common derivatives include options, swaps, futures contracts, etc. The cryptocurrency market has inherited many of these derivatives and added some of its own flares.
Different types of crypto derivatives trading
In the cryptocurrency market, options give traders the right, but not the obligation, to buy or sell an asset at a specific price on or before a certain date. Options can be useful for traders who wish to hedge their risk or speculate on the future price of an asset.
Swaps are another type of crypto derivative that allows traders to exchange one cryptocurrency for another at a predetermined price. Swaps can be useful for traders who want to hedge their risk or speculate on the future price of a cryptocurrency.
A futures (contract) is an agreement between two parties to buy and sell a particular asset - in our case, cryptocurrencies - at a predetermined price at a specified time in the future. Upon this agreement, the buyer is obligated to buy and receive the asset (known as the underlying) at the specified time (known as the expiration date), and the seller is obligated to sell and deliver the underlying at the expiration date.
Right now, the one crypto derivative that outshines almost all others, one that’s overwhelmingly welcomed, is perpetual futures.
As its name suggests, perpetual futures never expire. Since neither the buyer nor the seller is obligated to buy or sell the underlying, the price of perpetual futures contracts may deviate from the underlying’s spot price. The funding rate mechanism is invented to offset such deviation. Traders will either pay or receive fees periodically based on the difference between the underlying’s contract price and spot price. Like other futures contracts, perpetual futures are also traded on margin.
Related articles:
What Are Perpetual Futures Contracts?
Bitget Futures: Operational Guidelines
Bitcoin Futures Contracts on Bitget
Futures trading at Bitget
Launched in 2018, our efforts have resulted in a huge customer base of 8 million users from 100 countries and regions worldwide. In terms of scale, Bitget is indeed the world’s largest digital copy trading exchange, where over 80,000 professional traders have shared a total of US$20 million in profits.
As one of the Top 5 globally crypto derivatives platform by derivatives trading volume, Bitget has always been dedicated to providing traders with the best experience possible. We now offer the most comprehensive range of futures products in the world so that every user can find their own solution to crypto futures trading on Bitget: 130+ trading pairs across Bitget USDT-Ⓜ Futures and Bitget USDC-Ⓜ Futures for cautious traders, Bitget Coin-Ⓜ Futures for crypto-geeks and Bitget Copy Trade for those who want to generate a passive income stream with minimum risk. In addition, we have recently launched Bitget One-Way Mode for TradFi veterans, the innovative Bitget Delivery Contracts and Bitget Index Futures to help our users manage their portfolio more efficiently (time and cost-wise).
Trading futures at Bitget is as easy as it is intuitive:
1. Create a new Bitget account or log in to your existing one.
2. From the main asset page, you can choose to Deposit or Transfer funds to your Futures account.
3. Enter our Futures trading page and select your preferred trading pair.
4. Choose your margin mode, leverage ratio, price, and number for your contracts.
5. Click ‘Buy long’ or ‘ Sell short’ to submit your order. Buying long allows you to profit from the appreciation of the asset’s price while selling short does the opposite.
There are two modes of margin when trading Futures on Bitget: Isolated Margin and Cross Margin.
Isolated Margin mode divides your margin into each position. Should one of your positions is force liquidated, other positions will not be affected. This allows for easier margin management on single positions and is recommended for beginners.
Cross Margin mode opens a margin pool and automatically moves funds between positions. Excess margin can be transferred to more risky positions to avoid undesired force liquidations. This better manages risks for complex portfolios and is often preferred by long-term investors.
Margin and leverage magnify your profit as well as your loss to a great degree. We strongly recommend that you conduct adequate research and implement robust risk management and mitigation method for your maximum protection.
Check out these comprehensive guides for more detailed information about our different futures trading products:
Bitget Futures: Operational Guidelines
The Complete Guide to USDT-Margined Futures on Bitget
The Complete Guide to USDC-Margined Futures on Bitget
The Ultimate Guide to Bitget’s Coin-Margined Futures
Bitget Index Futures: Operational Guidelines
Why You'll Need Crypto Delivery Contracts: A Must-Have Manual For Traders
Popular futures trading strategies for beginners
There are a few simple strategies worth considering when dipping your toes in trading futures for the first time.
Grid trading: Futures grid trading is going back and forth - longing low and shorting high - at a few predetermined price points - grids. This significantly reduces risks and will help you profit through market volatility. Check our Futures Grid 101 guide and try it out for yourself now: Futures Grid Trading.
Dollar-cost-averaging (DCA): DCA is an investment strategy leveraged by many investors to hedge against volatility and unstable market conditions. If the asset price is going against your favor, this strategy will keep placing orders at preset intervals, trying to average out your cost. And when the asset price goes in your favor, you could potentially earn more profit since you’ve bought in at several lower price points. Check out brief guide on DCA and test this simple strategy at Bitget: Futures DCA.
Or, you can start following some of our most successful traders with our Futures Copy Trading product. As the world’s largest copy trading platform, Bitget has embarked on a journey of innovation ever since our inception, making trading easy and accessible to beginners and veterans alike. You can purchase strategies directly from or subscribe to our 80,000+ elite traders, and follow their steps in each and every trade they make. Our Copy Trading product has benefited over 380,000 followers, and you’re just a few clicks away from becoming one of them!
So why wait? Register now and start exploring the incredible Bitget-Verse today!
Guide to Bitget Spot Profit and Loss (PnL) Analysis2024-10-11 | 15m