Futures Trading

Futures Trading is a financial derivative that allows traders to profit by betting on the price fluctuations of underlying assets without needing to hold the assets themselves. It is widely used in the cryptocurrency market, offering two-way trading and leverage, but it also comes with a higher level of risk.

Contract leverage is a core tool in cryptocurrency derivatives trading, allowing traders to leverage larger market positions with a smaller margin, thereby amplifying potential returns and risks.

Hedging strategies and funding rate arbitrage in futures trading are two effective methods for managing risk and generating returns. Hedging helps investors stabilize asset value by offsetting the risk of spot positions; funding rate arbitrage, on the other hand, takes advantage of the funding rate mechanism of perpetual contracts to achieve low-risk returns.

In crypto trading, getting liquidated means losing your margin due to heavy losses on a leveraged trade. Here’s what it means, how it happens, and how to avoid it.