📊 What is futures trading?

🔝 We continue to talk about types of trading and today we will share information about such tool as crypto futures. There are two types of cryptocurrency futures: futures with a set expiration date and open-ended - contracts that can be traded permanently. The latter are more popular in the crypto market, so we will talk about them in more detail.

📉 Perpetual cryptocurrency futures are financial instruments that allow traders to enter into transactions to increase or decrease the value of a cryptocurrency without actually owning the asset. One of the main advantages of perpetual crypto futures is that there is no fixed contract execution date.

🔍 Let's look at an example. Let's say that Bitcoin is currently at $25,000 and you expect the price to increase in the near future. You open a long position (Long) of 0.1 BTC with $250 in your account and using 10x leverage. Your initial margin is $250 and the leveraged position size is $2,500.

🔹 If the price of Bitcoin increases by 5%, it will reach $26,255. Your profit would be $125.5.

🔹 If the price of Bitcoin falls 5% to $23,755, your loss would be $124.5. If the price of Bitcoin continues to fall, your position can be automatically liquidated to prevent a negative balance. The level of liquidation will depend on the margin and the amount of leverage.

🔔 It is important to remember that trading perpetual cryptocurrency futures involves high risks, especially when using leverage. So, don't forget about risk management and when trading cryptocurrency futures, stick to your chosen trading strategy and use Stop-Loss and Take Profit orders.

Updated on: 26/04/2023