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Cryptocurrency: Futures Trading 101 for beginners
The world of cryptocurrencies has exploded in recent years, the value of Bitcoin and other digital currencies rise to unprecedented levels. However, beyond the titles and the volatility of the market, there is a more nuanced aspect, which deserves to be explored: Futures trading.
Futures trading is an advanced financial strategy that involves the purchase or sale of contracts on assets, such as cryptocurrencies, goods or indices, at a predetermined price at a specific date. This article will deepen the basic elements of Futures Cryptocurrency transactions, its benefits and risks and will provide advice for beginners who want to start.
What are the future cryptocurrency?
Cryptocurrency futures are agreements between parties to buy or sell a basic asset (in this case, bitcoin) at a predetermined price at a specific date. The best known example is Chicago Mercantile Exchange (CME), which offers various Cryptocurrency futures contracts, including Bitcoin Futures and Futures.
Why is Futures Cryptocurrency trading?
Trading cryptocurrencies can provide more benefits:
- Liquidity : Like the largest market for digital coins, there is a vast network of buyers and sellers willing to trade at a time.
- Risk management : By buying or selling futures contracts, you can cover the volatility of prices and potential losses due to changes to the market conditions.
- Diversification : You can diversify the investment portfolio by incorporating the cryptocurrency in it.
key concepts
Before you sink into the world of cryptocurrency futures, it is essential to understand some basic concepts:
- Expiration data : Futures contracts have specific expiration data, after which they expire unnecessarily, if you do not meet certain conditions.
- Marriage requirements
: You will need to submit a margin (or "margin call") to cover potential losses or earnings on your trades.
- Leaving open positions : If your Futures position does not move in your favor, you can close it to block profits and avoid additional losses.
Types of Futures Cryptocurrency
There are several types of Cryptocurrency futures contracts:
- Physical products : Contracts that oblige you to buy or sell a specific amount of underlying assets (eg, Bitcoin).
- Index -based contracts : Contracts following an index, such as S&P 500, which can be used for coverage purposes.
- Square contracts on the spot : Contracts that allow you to buy or sell an asset at the current market price.
Benefits and risks
Benefits:
- Potential for significant earnings : Cryptocurrency futures trading can provide a way to speculate on price movements and can take potential from big changes in value.
- Diversification opportunities : By incorporating the cryptocurrency futures into your investment portfolio, you may be able to diversify your exposure to the crypto market.
Risks:
- Market volatility : The prices of underlying assets can fluctuate quickly, which leads to significant losses, if not properly managed.
- Riscuri de lichiditate : Activitatea de tranzacționare limitată poate duce la distribuții mai mari de ofertă și lichiditate redusă pentru tranzacțiile dvs.
- The risk of counterparty : You can be exposed to the risk of counterparty when using a third -party broker or exchange.
Tips for beginners
If you are new to the trading of the cryptocurrency futures, here are some tips to start:
- Educate -va : Find out about the basic elements of cryptocurrency markets and futures before investing.
- Start small : Start with a small position size and gradually increase as you gain experience and trust.
- Set clear goals : Define -Investment goals and risk tolerance before trading cryptocurrencies.
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