Portal:Crypto futures
Crypto Futures Portal
This portal serves as a central hub for information regarding Cryptocurrency futures contracts on this wiki. It aims to provide neutral, factual, and accessible information for users interested in understanding the mechanics, risks, and regulatory aspects of trading these financial derivatives.
Introduction to Crypto Futures
Cryptocurrency futures are derivative contracts that obligate the buyer to purchase, or the seller to sell, an underlying cryptocurrency asset at a predetermined price on a specified date in the future. They are traded on specialized exchanges and are distinct from spot trading, where assets are exchanged immediately.
Key concepts related to crypto futures include:
- Futures Contract: Definition and general characteristics.
- Leverage (Finance): How leverage magnifies potential gains and losses in futures trading.
- Margin (Finance): The collateral required to open and maintain a futures position.
- Settlement (Finance): The process by which futures contracts are closed, either through physical delivery or cash settlement.
Types of Crypto Futures Contracts
Crypto futures markets generally feature several contract types, differentiated primarily by their settlement mechanism and expiration structure:
Perpetual Futures
Perpetual futures contracts do not have a fixed expiration date. Instead, they utilize a mechanism known as the "funding rate" to keep the contract price closely aligned with the underlying spot price of the cryptocurrency.
Quarterly/Dated Futures
These contracts have a specific expiration date in the future. Upon expiration, the contract is settled according to its terms.
Inverse vs. Quanto Futures
Contracts can also be categorized by how they are margined and settled. Inverse contracts are typically collateralized by the underlying crypto asset itself, while Quanto contracts are margined and settled in a base currency (like USD or USDT) regardless of the underlying asset's denomination.
Risk Management in Futures Trading
Trading futures, especially with leverage, involves substantial risk. Users should be aware of the following potential risks:
- Liquidation (Finance): The forced closure of a leveraged position when the margin falls below the maintenance level.
- Volatility: The rapid and significant price movements inherent in cryptocurrency markets that can quickly impact futures positions.
- Counterparty Risk: The risk associated with the exchange or clearinghouse facilitating the trade.
Regulatory Environment
The regulatory status of crypto futures varies significantly by jurisdiction. Users should consult local financial regulations regarding the trading and offering of these derivatives. Regulatory oversight often focuses on exchange licensing, consumer protection, and market manipulation prevention.
Editing Guidelines for This Portal
To maintain the encyclopedic quality and neutrality of this portal, editors must adhere to the following guidelines:
1. **Neutral Point of View (NPOV):** All content must be presented factually, without bias toward or against crypto futures trading. Avoid subjective language, endorsements, or predictions of future market performance. 2. **Verifiability:** Claims, especially those relating to market size, specific exchange rules, or regulatory actions, must be supported by reliable, secondary sources cited using `<ref>...</ref>` tags. 3. **No Promotional Content:** Do not include links to specific trading platforms, advertisements, or solicitations for trading services. 4. **Clarity and Accessibility:** Content should be written clearly, defining technical jargon for readers new to the subject. 5. **Internal Linking:** Maximize the use of internal wiki links to established articles on related financial and cryptocurrency topics.