Introduction:
Cryptocurrency, Bitcoin and digital assets are denoted as volatile investments. The tactics of cryptocurrency trading is many traders are trying to manage their risk simply by buying an bitcoin, cryptocurrency and digital asset when the price drops or selling it when the price goes up.
The unexpected side of this tactic is that many times your profit money is left on the table after you leave the market. Unfortunately, If the price continues to rise after you sell you are going to missing out on profits you could’ve earned had you left your position open.
But in the key benefit of futures trading is that, you can hedge existing spot positions without additional crypto - allowing you to be agile and prepared for any market environment.
The fine crypto trading solution article for crypto exchange beginners to gather full knowledge about the cryptocurrency trading options like margin trading and future trading.
Let we get into the article by describing the step by step process of crypto trading options in the crypto exchange platform.
Table of Contents:
- 1. What is contract trading?
- 2. How contract trading works?
- 3. How contract trading is more superior than normal trading?
- 4. Benefits of Contract Trading
- 5. Why major exchanges created contract trading like Huobi, Bitmex and bybit?
1. What is cryptocurrency future or contract trading?
Future Trading is also named as contract trading. Futures, or futures contracts, are executed by a contract or agreement to buy or sell a digital asset at a later date for a fixed price. These benefits are typically used by crypto traders as a way to hedge other investments or to lock in profits while trading in volatile crypto markets. The prices for Kraken's futures are based on aggregated indices that represent the demand for each cryptocurrency from a different crypto exchanges, so pricing is always clear and transparent.
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