Dated futures

Dated Futures

Dated futures are a type of futures contract where the settlement date is fixed and predetermined. Unlike perpetual futures, which have no expiration date, dated futures are designed to expire on a specific date. These contracts are widely used in crypto trading to hedge against price volatility or speculate on future price movements. In this article, we’ll explore how dated futures work, how to get started, and some tips for beginners.

How Dated Futures Work

Dated futures contracts are agreements to buy or sell an asset (like Bitcoin or Ethereum) at a predetermined price on a specific date in the future. Here’s a breakdown of how they function:

**Expiration Date**: Every dated futures contract has a fixed expiration date. On this date, the contract is settled, either by delivering the asset or through a cash settlement.
**Leverage**: Traders can use leverage to amplify their positions. For example, with 10x leverage, a $100 investment can control a $1,000 position.
**Settlement**: At expiration, the contract is settled based on the asset’s price at that time. If the price is higher than the contract price, the buyer profits, and vice versa.

Example of a Dated Futures Trade

Let’s say you believe the price of Bitcoin will rise by the end of the month. You buy a dated futures contract for 1 BTC at $30,000 with an expiration date of 30 days later. If the price of Bitcoin rises to $35,000 by the expiration date, you profit $5,000 (minus fees). However, if the price drops to $25,000, you incur a $5,000 loss.

Getting Started with Dated Futures

To start trading dated futures, follow these steps:

1. **Choose a Platform**: Register on a reliable crypto exchange like Bybit or Binance. 2. **Fund Your Account**: Deposit funds into your trading account. Most platforms accept cryptocurrencies like Bitcoin or Ethereum. 3. **Select a Contract**: Choose a dated futures contract that matches your trading strategy. Pay attention to the expiration date and leverage options. 4. **Place Your Order**: Decide whether to go long (buy) or short (sell) and place your order. Monitor the market to manage your position effectively.

Risk Management Tips

Trading dated futures involves risks, so it’s essential to manage them wisely. Here are some tips:

**Use Stop-Loss Orders**: Set a stop-loss order to limit potential losses. For example, if you buy a contract at $30,000, you might set a stop-loss at $28,000.
**Avoid Over-Leveraging**: While leverage can amplify profits, it also increases losses. Use leverage cautiously and only with funds you can afford to lose.
**Diversify Your Portfolio**: Don’t put all your funds into a single trade. Spread your investments across different assets to reduce risk.

Tips for Beginners

If you’re new to dated futures trading, keep these tips in mind:

**Start Small**: Begin with a small investment to get familiar with the market and trading mechanics.
**Learn the Basics**: Understand key concepts like leverage, margin, and settlement before diving in.
**Practice with a Demo Account**: Many platforms offer demo accounts where you can practice trading without risking real money.

Conclusion

Dated futures are a powerful tool for crypto traders, offering opportunities to profit from price movements while managing risk. By understanding how they work and following best practices, you can make informed trading decisions. Ready to get started? Sign up on Bybit or Binance today and explore the world of crypto futures trading!

Sign Up on Trusted Platforms

The most profitable cryptocurrency exchange — buy/sell for euros, dollars, pounds — register here.

Join Our Community

Subscribe to our Telegram channel @cryptofuturestrading for analytics, free signals, and much more!