What is Cryptocurrencies Futures Trading?
Crypto futures are contracts that represent the value of a specific cryptocurrency. You do not own the underlying cryptocurrency when you purchase a futures contract. Instead, you own a contract under which you have agreed to buy or sell a specific cryptocurrency at a later date. A crypto futures contract is also a proxy tool for investors to speculate on the future prices of cryptocurrencies. Cryptocurrency futures are contracts between two investors that bet on a cryptocurrency's future price. Flexibility, Leverage, Liquidity and portfolio diversification are some of Cryptocurrencies Futures benefits.
What are the differences between Spot Trading and Futures Trading?
Spot Trading refers to buying or selling cryptocurrencies in real-time settlement, realizing the exchange between two different cryptocurrencies, which will be credited to your account. In Futures Trading, you're not actually trading the "crypto", but the "contracts" that represent the crypto. Holding the contracts means you will buy or sell the represented crypto at a certain time in the future. The main differences between Spot and Futures trading is Leverage, Flexibility to Long or Short, Liquidity and Prices.
What are the differences between Spot and Futures Trading Prices?
Cryptocurrency prices are determined by buyers and sellers through an economic process of supply and demand. The spot price is the ruling price for all transactions in the spot market. The futures price, on the other hand, is based on the prevailing spot price plus the futures premium. The futures premium could be either positive or negative. A positive premium indicates that the futures price is higher than the spot price; conversely, a negative premium indicates that the futures price is lower than the spot price. Changes in supply and demand may cause the future premium to fluctuate.
Coinlocally Futures Trading Interface
- The navigation bar contains links to other Coinlocally pages, such as Market, Spot, etc.
- The current contract’s name (BTCUSDT by default), Mark Price, Index Price, Funding Rate and Contract statistics.
- Buy and Sell Order Books
- A Price Candlesticks Chart
- Order Entry Panel contains (Margin Mode, Leverage, …)
- Available Assets (By clicking on [Transfer], you can transfer funds between your Futures Wallet Spot Wallet).
- This is also where you can view information relating to the current contract and your positions. Be sure to keep an eye on the Margin Ratio to prevent liquidations.