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Explain the meaning for Crypto Perpetuals/Futures
Futures contracts are agreements made between a buyer and a seller to complete a crypto transaction on a specified date for a specified price. Futures prices are often different to that of Spot prices, as they are guided by different forces in the market. Traders are able to find live futures quotes in the same way they would find Spot quotes, by heading to crypto futures trading platforms and observing live prices.
In the US Market, Futures contracts are a very popular means of trading. Therefore, there is a lot of demand for Futures trading from major crypto markets. In cryptocurrency, Futures trading is an alternative trading form to the traditional Spot and Margin trading types. US Market Futures does a lot to drive the global market, and as a result traders will often turn to US Market Futures trading for market indicators.
To have an understanding of how futures prices are determined, we must first consider how futures trading works. Futures prices are not determined by the price of a crypto on the day a Futures contracts transaction takes place. Whereas we can get a basic understanding of crypto market prices from mechanisms such as the reference rate, Futures prices are ever-changing, and aren’t necessarily driven by the same forces as Spot markets.
A particular type of Futures contract you can trade in is perpetual. Meaning there is no specified settlement date to the contract, perpetual futures contracts are a particularly popular form of futures investment - especially in US Market futures. Cryptocurrency futures are seen as an easy way to diversify your portfolio and hedge against the forces of the spot market.
Allowing traders to perpetually hold on to cryptocurrencies such as Bitcoin, futures of a perpetual nature don’t require a settlement date - this is the key differentiator between a normal futures contract and a perpetual futures contract.
Bitcoin futures is a popular form of US Market futures trading, with millions trading in Bitcoin futures on a daily basis. Trading volume in this popular sector of US Market futures would be in the billions every single day, owing to its popularity.
Bitcoin futures can also be perpetual, meaning you can establish a contract for Bitcoin futures whilst protecting its value from the forces of the market. That said, with perpetual meaning you can lock in a price for a contract that isn’t necessarily reflective of the current market rate.
Meaning of Crypto Perpetuals/Futures Explained?
As we have established, Futures trading is essentially a form of contract trading. You don’t actually trade crypto here; more, you trade a contract with a commodity like a crypto underpinning its value. You can retrieve live futures quotes from almost all top exchanges as they change, and having access to live market prices would be an indicator of what would be the best app for futures trading.
The demand coming from US Market Futures trading makes future derivatives trading a hugely sought after form of crypto investment. There are millions of traders involved in crypto futures, with Futures trading volume in the billions and live futures quotes being sought after by the second.
The perpetual meaning when it comes to futures simply refers to the end date of the futures contract. A typical futures contract will have a settlement date, when the price agreed within the contract must be paid. With perpetual meaning that there is no agreed settlement date, contracts can run for as long as the contract owner wants them to.
So, as we can see, with perpetual meaning there is no contract end date, traders are able to keep hold of their contracts for as long as they see fit. US Market futures traders see this as an effective way to trade Bitcoin futures, and the US Market futures volume makes up a significant portion of the overall market.
What Is A Crypto Futures Contract?
A crypto futures contract is an agreement to buy or sell a particular commodity on an agreed date for a specific price. It is not dependent on the price of that commodity on the day of the sale, as there is an agreement already in place to complete a transaction under specific conditions. With futures trading, crypto isn’t actually the thing that’s traded - it’s actually the contract that is underpinned by the value of the commodity that’s being traded. In the US Market, futures trading is one of the most popular forms of crypto trading - particularly perpetual, meaning the appetite for this type of trading in the region is large.
- Best for crypto Futures Trading every minute of every day: ZB.com
- Best crypto futures trading platform: ZBG
- Best app for futures trading: ZB Pro
Best for crypto Futures Trading every minute of every day: ZB.com
ZB.com is a long-established crypto trading platform, in operation since 2013. Of the Futures trading crypto contracts ZB offers, they are all perpetual - meaning if you want to trade perpetual futures, ZB.com is the best place to go.
Best crypto futures trading platform: ZBG
ZBG is a subsidiary of ZB.com, and with their futures contracts also being perpetual meaning there’s an opportunity to hold your futures contract infinitely, it is a good alternative to the traditional ZB.com platform whilst also trading with a platform that has significant levels of experience.
Best app for futures trading: ZB Pro
ZB Pro is arguably the best app for trading futures. Contracts on ZB Pro are perpetual meaning they can be opened for an unspecified period of time. What makes ZB Pro the best app for trading futures is its smooth and agile interface, ever-expanding list of futures trading pairs, and ease of access to funds. A key requirement for the best app for trading futures is simply that they offer contracts that are perpetual, meaning traders have the opportunity to both dabble in spot markets for a short term focus, whilst also thinking long term for futures. ZB Pro offers both of these.
- Best for Fund Investing: Charles Schwab
- Best for Options Trading: TD Ameritrade
- Best for Futures Trading: TradeStation
What is a Perpetual Contract?
There is a very specific explanation, in the context of Futures contracts, for the term perpetual - meaning it’s a contract that doesn’t have an expiry date. If a Futures contract is perpetual, meaning it has no specified settlement date, traders can hold on to their contract for as long as they want to. With perpetual meaning that contracts can last for an infinite period of time, traders are able to ride out some of the storms that a Spot position may fall victim to.
One particular place where Perpetual contracts are popular is in the US Market. Futures trading makes up a considerable proportion of trading in this region, with trading volume being very high here. The US Market futures focus is as significant as anywhere in the world.
The popularity of US Market futures contracts means that there is a significant amount of trading volume coming from this region. This is particularly true for contracts that are perpetual, meaning trading volume on Bitcoin futures, for example, is as high in the US Market Futures as any region around.
What is a Reference Rate?
A reference rate is taken as a price snapshot in a crypto market. The reference rate is used to give an indication of a token’s performance on any given day, and traders will often line these prices up against each other to see how a token has been performing over a period of time. With Futures trading, crypto prices are locked in when the contract is agreed - therefore, the reference rate may act as a guide, however it won’t always be indicative of the price locked in.
Best Crypto Exchange for Futures Trading?
There are many crypto futures derivatives platforms available to skilled traders looking to take advantage of their significant market knowledge in new environments. Most top crypto exchanges will offer the opportunity to trade futures contracts, and one example of such an exchange is ZB.com. With a crypto futures trading volume of over $5 billion per day, ZB.com is one of the world’s most popular futures trading exchanges. Contracts on ZB.com are perpetual, meaning they are offered without the requirement of setting an end date.
What’s the difference between Perpetuals and Futures contracts?
Cryptocurrency futures typically have a settlement date. That is, a date on which the conditions of the futures contract is to be paid for is stipulated within the contract. However, with perpetual meaning ‘ongoing’ or ‘endless’, these types of contracts do not have a specified ending date. Therefore, these contracts then become perpetual, meaning they can be kept open for as long as the holder wants to keep them open.
Advantages of Trading Futures
- If you have strong indications about the direction of a market, you can establish a contract that is based on these indications
- Hedge against volatility - while Spot positions will be manipulated by the ever-changing nature of the market, Futures contracts are able to lock in value
- High leverage - you can multiply the size of your Futures investment considerably
- Diversify your portfolio - establish more than one type of investment in your trading. With the opportunity to go perpetual meaning you can hold a Futures contract for as long as you wish, Futures should always be something that’s considered as part of your portfolio
- Lots of liquidity - Futures markets have a lot of liquidity, providing significant opportunity to traders across multiple markets
How to download ZB Futures
- Firstly, download the ZB Pro app
- Create your account on ZB Pro, and complete the KYC process
- Deposit funds into your account via bank transfer, credit/debit card or on ZB’s P2P trading platform
- Transfer funds that have been deposited into your Spot account to your Futures account
- Begin Futures Trading!
Best apps for Futures trading?
Below are best platforms for cryptocurrency futures trading as per public analysis.
- Best crypto security trading: ZB.com
- Most number of coins: Binance
- Best Decentralized Exchange: Bisq.
- Best for Altcoins: BitMart
What Are Cryptocurrency Futures?
Cryptocurrency Futures contracts are trades completed by crypto futures trading enthusiasts that lock in the price of a commodity in the future, rather than trading their present value. Futures prices are not necessarily determined by the price on the day of the transaction. Instead, they are determined by the price that is decided for the future.
With Futures trading crypto isn’t itself traded - more, the value of a contract associated with the crypto is traded.
Best exchange for futures trading?
While in the US Market Futures tends to lead the way in trading terms, there are many alternatives away from the US Market Futures traders can look towards for a great trading experience.
What is futures trading?
Cryptocurrency Futures trading is a form of futures derivatives trading. With cryptocurrency futures, traders are actually buying and selling the price of a contract, rather than a cryptocurrency. When differentiating Futures trading from Spot and Margin trading, it is always important to remember this crucial fundamental aspect of how futures trading works.
What are derivatives?
Future Derivatives are contracts that derive their value from an underlying commodity linked to the contract itself.
What are perpetual contracts?
In the context of Futures trading, the Perpetual meaning derives from the contract’s end date - more, that there isn’t an end date with perpetual contracts. While traditional futures trading crypto contracts have a settlement date, perpetual contracts don’t. This means they can continue on for as long as the contract owner wants them to.
How Futures trading works?
Futures trading is a form of contract trading that executes trades based on valuations that are settled in the future. Taking Bitcoin futures as an example, the trader will not actually trade a Bitcoin, but they will trade the valuation of the Bitcoin futures contract, which is settled at a date that is in the future.