Futures (6)

Futures emerged as a new opportunity for traders to gain exposure to crypto and grow their portfolios. For daily volume, some exchanges now attract higher volume on futures trading than on spot or other markets.

As the popularity of cryptocurrencies grew, traders inevitably wanted more ways to trade cryptocurrencies and grow their portfolios. Futures contracts emerged from these wants, and were later modernized and adapted to the crypto markets through perpetual futures, without an expiry.

As the popularity of cryptocurrencies increased, futures contracts were developed to offer greater liquidity and resources for traders who are actively involved in the market. Cryptocurrency Futures allow for easy speculation on future price changes using significant leverage. Nevertheless, the futures market requires knowledge of different trading tactics to reduce risks and optimize gains. 

In trading, leverage can be a powerful tool to increase gains without requiring more money to trade. Here, exchanges allow users to ‌borrow funds and trade larger position sizes than their own capital will allow. That might seem ideal, but it’s important to remember that when leverage is applied, the trader’s losses are magnified. As always, careful risk management and thorough research are a must. 

Have you ever wanted to speculate on the future prices of coins and tokens without the hassle of directly owning it or dealing with expiry dates? Enter perpetual futures contracts — crypto derivatives that simplify the futures trading experience by doing away with spot ownership and settlement dates. While these innovative financial instruments offer just that, they're ultimately risky and require experience in crypto trading before diving in.

Best-bid-offer (BBO) refers to the best bid and ask price on the order book at any given time. It's used to quickly set limit order prices that match the best market quotes. Let's break down the two key components of the BBO: