A Beginner’s Guide To Trading Ethereum Futures.
Ether futures are legal agreements to buy or sell Ether at a future date. Ether futures derive their value from Ether — the world’s second-largest cryptocurrency. Ether futures is a contract representation of Ether, and the actual settlement of Ether (or cash) will happen in the future - when the contract is exercised.
Ether futures are often used to hedge against price changes of Ether. Additionally, they enable investors to speculate on the asset's underlying trend. To put it simply, you can purchase (go long) Ether futures if you expect prices to rise. When prices fall, you take a short position to reduce the impact of losses.
Benefits of Trading Ether Futures
Non-Ether holders can speculate on the price of Ether and make quick profits. You can open a position in an Ether futures contract with USDT, and any profits made will be settled in USDT.
Gain significant exposure to Ether with only a fraction of its total cost. With leverage, you can magnify small price movements to create profits that justify your time and effort.
Ether futures markets are extremely liquid, with trillions in trading volume. A liquid market is less risky because traders can enter and exit their positions easily with minimal slippage.
Diversify across trading strategies to generate more profits. Traders can now develop sophisticated trading strategies such as short-selling, arbitrage, pairs trading, etc.
Types of Ether Futures
Binance offers Ether futures through two flagship products: Ether Futures Perpetual and Ether Futures Quarterly. There are two main factors that distinguish them: Expiration and Funding Fees.
Ether Perpetual ContractsEther Perpetual Contracts
Ether Quarterly ContractsEther Quarterly Contracts
Ether futures quarterly contracts have a limited lifespan, they expire every quarter. For instance, a ETHUSD Quarterly 0925 contract will expire on 25 September 2020, 08:00:00 UTC. On the other hand, Ether futures perpetual contracts do not expire, which means a trader can hold a position to perpetuity unless he gets liquidated.
Ether futures perpetual contracts carry a funding fee. Funding fees are the cost of holding perpetual contracts and they are paid peer-to-peer. Depending on their positions, traders will either pay or receive funding. Binance recalculates the Ether funding fee every eight hours.
Why Trade Ether Futures on Binance?
Ideal for beginners since it has a simple user interface. Binance is a perfect choice for traders searching for the hottest cryptocurrency futures as the exchange supports the widest variety of altcoins.
High Liquidity & Volume
The largest derivatives exchange by volume and open interest. In January 2021, the exchange processed over $1 trillion in volume, dominating the derivatives sector with a 40% market share.
Secure & Safe
Strong emphasis on security, offering 2-FA and anti-phishing measures. Binance Futures also operates several insurance funds to safeguard users from adverse market risks.
With the integration of Binance Spot and derivative markets, Binance offers a complete ecosystem to fully utilize crypto assets and manage portfolio risks.
How to Sell/Short or Buy/Long Ether Futures on Binance?
Trading in Ether futures is easier than most beginners might think - all you need is a futures trading account. Follow this five-step process to buy or sell an Ether futures contract on Binance:
Open a futures trading account on Binance. Please note that you must enable a 2FA verification to fund your futures account before you start trading on Binance Futures.
Ether futures is an exciting and fast-growing market that attracts trillions of volume and liquidity worldwide. When deciding whether Ether futures are for you, consider your risk tolerance and financial goals.