With the constant evolution of the financial landscape, derivative financial instruments such as futures are playing an ever more significant role in investment strategies. The growing popularity of futures in the cryptocurrency market has unveiled new opportunities for investors.
1. What is Futures?
A futures contract is a formal agreement between two parties to buy or sell an underlying asset at a predetermined price and a specified time in the future. It is an important derivative instrument in the financial market to manage and hedge price risks. To illustrate, farmers and food companies may utilize futures contracts to secure the future price of a specific crop. The value of futures is directly tied to the underlying asset, whether it's a commodity, currency, stock, or bond, and they can be traded on specific exchanges or over the counter.
2. What is Crypto Futures?
As the cryptocurrency market continues to mature, derivatives have made their way into the arena. Crypto derivatives, particularly futures, empower investors to speculate on or hedge against future price fluctuations of underlying assets. This not only offers a means for investors to safeguard themselves against the volatility of crypto assets but also facilitates the execution of more complex trading strategies, such as arbitrage based on the expected price differences.
3. What are the advantages of Crypto Futures?
· Flexibility
Profit can be made by speculating on the price movement of cryptocurrencies without actually owning them. For example, through trading with USDT, investors can capitalize on anticipated price increases or decreases.
· Leverage
Leverage empowers you to control a large amount of assets with a relatively small margin. For instance, utilizing 10x leverage will magnify your investment by a factor of 10.
· Liquidity
Thanks to the high trading volume, investors can swiftly enter and exit the market in most cases without causing significant price fluctuations.
· Diversified Portfolio
In addition to basic trading strategies, investors can also explore advanced approaches such as calendar spread arbitrage, cross-species arbitrage, hedging, and more to chase higher returns in diverse market conditions.
4. What are the features of BingX Perpetual Futures?
Perpetual Futures stands out as one of the most sought-after futures products in the crypto derivatives market. BingX Perpetual Futures is a perpetual contract with USDT as the margin. It has no delivery date and never expires, offering several distinctive features:
- No delivery date, allowing traders to hold their positions for a long time to obtain greater investment returns.
- Anchored to the Spot market price of digital assets, preventing large-scale traders from maliciously manipulating market prices.
- Flexible and adjustable leverage of up to 150x, ensuring an optimal trading experience.
- Cross margin and isolated margin modes supported to better meet the risk management needs of traders.
Reference: Perpetual Futures | A Quick Comparison Between Perpetual Futures and Standard Futures
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