Buy Crypto
Pay with

Introduction to Binance Futures

How can we help you?
Account Functions
Binance Fan Token
Binance Earn
Crypto Deposit/Withdrawal
Buy Crypto (Fiat/P2P)
Spot & Margin Trading
Crypto Derivatives
Futures Contracts
Introduction to Binance Futures
Strategy Trading
USDⓈ-M Futures Contracts
COIN-M Futures Contracts
Futures Guide
Cross Collateral
Hedge Mode
Types of Orders
Binance Futures Welcome Bonus Coupon
Futures Service Agreement
Binance Futures Related Programs
Trading Rules
Leveraged Tokens
Terms of Use

What are Cryptocurrency Futures

2021-06-29 08:50

What are Futures Contracts?

Futures contracts are an essential part of traditional finance: they are highly complex financial instruments that advanced or technical investors use. Investors, corporations, and governments use derivatives such as futures contracts to protect their exposure to risk and volatility of asset prices.
A derivative is a financial contract that derives its value from an underlying asset. Traditionally, derivatives are used in markets such as commodities, currencies, stocks, or bonds. These contracts can be traded over the counter or through an exchange.

What are Cryptocurrency Futures?

In the crypto industry, the futures market is a fast-growing sector that generates trillions in volume monthly. Like stock options or commodity futures contracts, crypto futures offer protection against volatility and adverse price movements on cryptocurrencies. A crypto futures contract is also a proxy tool for investors to speculate on the future prices of cryptocurrencies. It can also be used to hedge against price changes of cryptocurrencies.

Benefits of trading Cryptocurrency Futures

  • Flexibility: Non-crypto holders can speculate on the price of a cryptocurrency and make quick profits. You can open a position in a crypto futures contract with stablecoins such as USDT, or any cryptocurrencies, and any profits made will be settled in the currencies you selected.
  • Leverage: Gain significant exposure to a specific cryptocurrency 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.
  • Liquidity: Crypto 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.
  • Portfolio Diversification: Diversify across trading strategies to generate more profits. You can develop sophisticated trading strategies, such as short-selling, arbitrage, pairs trading, etc.