How can you sell your Bitcoin Futures profitably?

Similar to other assets, Bitcoin has a futures market, but if you sell a BTC futures contract, it implies a bearish approach and a guess that bitcoin will drop in price. If you want to sell your BTC futures contracts with a great profit, they you may need to Short Bitcoin Futures

BTC futures are live at crypto exchanges, so you will be capable of hedging Bitcoin exposure or control its performance by means of a futures product developed by the top and major derivatives marketplace:

You have many options to short-sell your Bitcoin Futures. These options include:

Short selling the Bitcoin directly: This is considered the easiest way to sell your bitcoins. You can sell off your accessible Short Bitcoin Futures at a price you are at ease with. Your expectation is that the value of the bitcoin decreases further and then, if you so decide, you can purchase Bitcoin again at a lower cost.

Margin Trading: Numerous people start short selling their Short Bitcoin Futures by making use of a Margin Trading gateway, which is committed to cryptocurrencies. With this kind of trading, you borrow cash from a broker and can do the trade, expecting that your stake will pay off. Currently, many Bitcoin exchanges allow margin trading, so you have an abundance of options.

Futures Trading: You can also find ways to short sell your Bitcoins in the futures market, as well and one such way is Futures Trading. It is nothing but a contract in which as the buyer, you agree to purchase Bitcoin at a potential date at a certain set price. In this kind of trading, you are forecasting and expecting that the Bitcoin price will increase. Thus, when your contract ends you can purchase Bitcoin below the BTC Futures Price of the market.

Binary Options Trading: This is another easiest way short selling your Bitcoins. This type of trading usually includes two options, such as Put and Call. Through the put option contract, you will have the right to put up a specified amount of your Bitcoins for sale. You can set a price yourself at a certain time, which is known as the strike price. This option gains value while Bitcoin loses its value compared to the strike price. Notably, you are not compelled to put up the option for sale if you do not want.

When it comes to the call option contract, it will offer you the right to purchase shares in the same manner. With this type of option contract, you will have the choice to purchase a certain quantity of Bitcoin at a specific BTC Futures Price until a certain date, which is the ending date.

With the instability, you do not need to wait for a full-on bubble explodes to profit. You can gain from even comparatively small drops in value, as well as the more tremendous fluctuations in the value of Bitcoin.

Like with any investment, learning the way to short sell Bitcoin is not as easy as you imagine. It needs deep research and some enthusiasm to acknowledge the risk. Most financial consultants would associate it with betting, but if you correctly play your cards right, then you can greatly benefit monetarily.

What are BTC perpetual contract and BCH Perpetual Contract?

BTC or Bitcoin is considered the most famous cryptocurrency on the earth. It is the major cryptocurrency in the world, as well, in terms of trading volumes as well as market capitalization. Traders can margin trade Bitcoin on any Exchange by making use of their derivatives, such as a BTC perpetual contract or a BTC futures contract.

As a decentralized digital currency, it works without a single administrator or a central bank. This means that the bitcoin Peer-to-peer swap can take place without the necessity of any sort of intermediary. Trades have the liberty to trade bitcoin by going short or long with leverage.

BTC perpetual contracts are intended to offer income of the underlying Bitcoin spot market with the additional benefit of leverage. These contracts do not usually have an ending date. Moreover, the contracts are usually quoted in the currency of the United States. This means that all calculations that are pertained to margin, loss, profit, as well as the settlement are denominated in BTC.

The perpetual contracts in bitcoin are margined in BTC, meaning you are required to have BTC to deal with these contracts. The maximum allowable leverage for perpetual contracts in BTC is 100 times of the Underlying Index. The underlying index for these contracts is DEXBTUSD. It is made up of equal weighted average price of BTC/USD from coinbase, bitstamp, and kraken.

When it comes to funding, it is considered a sequence of continuous payments that are swapped between shorts and longs in a perpetual contract. This is done with the intention of keeping the price of the BTC perpetual contract tethered to the basic index.

The funding rate is equal to the difference between the the marked price and the price of the underlying index at any given time. Funding is considered an eight-hourly interest rate, is calculated, and exchange every minute. When the funding rate is encouraging, longs pay shorts. When it is depressing, shorts pay longs.

BCH, which stands for Bitcoin Cash Series, is a derivative. It enables traders to guess on the future value of the Bitcoin swap rate and Bitcoin Cash. Traders do not need to have Bitcoin Cash to buy and sell the BCH futures contract and the BCH Perpetual Contract. This is for the reason that it only needs Bitcoin as margin.

The underlying of BCH future is the BCH/XBT swap rate as recorded in the BBCHXBT Index. The BCH Futures and perpetual contracts are quoted in Bitcoin and all PNL and margin calculations are denominated in Bitcoin.

When it comes to the margin and leverage of the BCH Perpetual Contract, all of them will be posted in Bitcoin. This means that traders will be capable of going short or long the contract exploiting only Bitcoin. The maximum permitted leverage of BCH futures contracts features 20 times of the underlying index. This means that if you are a trader and would like to purchase 10 Bitcoin value of contracts, you will only need 0.5 Bitcoin of preliminary margin. When it comes to settlement, the BCH futures contracts will decide on the .BBCHXBT30M Index Price.

What is an ETH Perpetual Contract?

BitMEX or the Bitcoin Mercantile Exchange is considered the most popular exchange amid traders for trading their Bitcoins. This is for the reason that the exchange is committed to offering BTC Perpetual Contract, which allows 100 times leverage on their perpetual swaps.

A Typical ETH Perpetual Contract refers to a contract for the Ethereum cryptocurrency. Bitcoin derivatives, chiefly perpetual swaps are surging in fame in 2019, with the CME or the Chicago Mercantile Exchange and other Bitcoin derivatives gateways all recording huge volumes during the past few months. These derivatives gateways have drawn a combination of both retail, as well as professional traders, even though current analysis details that, traders on average, do not use the utmost leverage and they have minimum success rates if they do.

An ETH Perpetual Contract is a form of a futures contract for the Ethereum Bitcoin, which is an agreement between two parties to sell or buy Ethereum at an explicit date and price in the future. Futures are a form of derivative, where the value of the agreement is based on the underlying value of the Ethereum cryptocurrency.

However, perpetual ETH swaps are an exceptional form of the futures contract, known as an inverse futures contract. These contracts work in a similar fashion of standard Bitcoin futures contracts, where money-settlement of the Ethereum cryptocurrency can be achieved without delivering the cryptocurrency physically. The major difference is that with inverse futures for the Ethereum cryptocurrency, the resolution of an ETH/USD futures contract will be in Bitcoins, which will be the base currency, rather than being settled in USD.

As a result, the USD is understood as the product in a standard futures market, while ETH stands for the settlement of the contract.  This has numerous benefits for exchanges and strives to duplicate spot markets with overstated leverage.  The two main benefits include:

1. Inverse futures contracts for the Ethereum cryptocurrency facilitate investors to buy and sell the cryptocurrency against fiat pairs devoid of actually having a revelation to the fiat. Such a trade model can avoid several of the regulatory barriers that entail fiat deposits on exchanges and manacle their capability to offer a variety of instruments.

2. Inverse futures for the ETH cryptocurrency are realistic for traders, who are looking for a way to hedge positions in the currency of the United States by opening short positions.

The inverse futures ETH Perpetual Contract is not the complete level of perpetual swaps. The perpetual aspect originates from the solution of BitMEX to a problem among many crypto traders, particularly margin traders, where ending of contracts was steadily problematic.

Ending of a futures contract commences settlement, where the futures price is required to be equal to the spot price of the underlying Ethereum cryptocurrency. When settlement nears, the price of the futures contract is likely to converge on the index price.

At an advanced level, BTC Perpetual Contract for ETH swaps are a fake margin trading tools where a series of everlasting futures contracts include an interest rate that symbolizes the difference between the spot price of the ETH cryptocurrency and the price of the swap contract. This is quoted by making use of the weighted BitMEX index. This will consist of BitStamp, Coinbase Pro, and Kraken XBT/USD prices.

What are BTC Futures and BTC Futures Contracts?

A Bitcoin exchange, whether it is futures or spot, works similar to an online trading firm, will charge its customers a fee to perform trading activities. As exchanges will stumble upon the jeopardy of hacking and burglary, it is shrewd not to trust a Bitcoin exchange with all your Bitcoins. You are supposed to split and keep them separately in other devices or cold storage.

Currently, as BTC futures are being offered by some of the most famous marketplaces, traders, investors, as well as speculators will get a bounty of benefits. These are centralized marketplaces, which will make trade easy based on the outlook of a trader for bitcoin prices, get exposure to bitcoin prices, or they will hedge the positions of their existing bitcoins.

Overall, the introduction of bitcoin futures by CME and Cboe will make price discovery as well as price transparency easy, facilitate risk-management through a controlled bitcoin product, and provide a further drive to bitcoin as an acknowledged asset class.

BTC Futures Contracts are a practice of hedging positions and reducing the unknown risk. These contracts are used for sorting out between current spot and future contracts, as well. Bitcoin futures have been more related to miners who come across the risk of future prices, which cannot be known.

Every month, millions of futures contracts have been sold in the market. The size of the standard contract will usually start at $10. BTC/USD-3.14 is a typical instrument, in which BTC/USD refers to the swap rate of exchange between Bitcoin and the US currency, which is the Dollar. The numeral 3 signifies the month of March, and the number 14 denotes the year 2014. BUH4 will be the trading symbol of BTC/USD-3.14. Every month, the instrument will have a trading symbol, such as H will denote the March month, B the BTC, the letter U will stand for the US Dollar, and the number 4 will signify the year.

In a BTC Futures market, an investor has to purchase 50 futures contracts if the cost is $500/BTC, each will assume the value of $10.If you would like to open an encouraging position, then you have to go long with buy contracts. If you decide to open a pessimistic position, you will go short with sell contracts. Your position can be either optimistic or pessimistic for the same instrument.

If you are new to the world of Bitcoin trading, meaning if you are a new bitcoin trader or investor, then you will be in a great concern due to the increase or decrease in prices of bitcoins. The major reason for the price fluctuations of this cryptocurrency is chiefly because of the lack of confidence in the bitcoin structure, its easily broken status, as well as due to its severe reaction to bad news. This will often show the way to a sheer price fall, sooner than the increase of its price again. However, in these days, this wild rice fluctuation of the cryptocurrency has somewhat calmed down when compared to the volatility of bitcoin at the time of its launch.

What are cryptocurrency derivatives

Cryptocurrency derivatives are nothing but a financial agreement between two or more traders, deriving their value from an original asset, known as a cryptocurrency. More particularly, a cryptocurrency derivative is a concord to purchase or put a cryptocurrency up for sale at a determined cost and a specific time in the future. However, these derivatives do not usually have direct or inherent value by themselves. This means that their value is purely derived from the expected future cost movements of the original cryptocurrency.

In the world of finance, there are three general types of derivatives, whether they are bitcoin derivatives, Ether derivatives, or any other cryptocurrency derivative. These major forms of derivatives include:

Futures: It is a financial agreement where a buyer has a compulsion for a purchaser to buy a cryptocurrency or a seller to sell his cryptocurrency at a flat price and a preset future cost.

Swaps: Swaps are an arrangement between two parties to exchange a sequence of money flows in the future, more often than not derived from interest-bearing products, such as bonds, loans, or notes as the original asset. The most general form of a swap is the interest swaps. This type of swap will usually involve the exchange of a future flow of permanent interest rate payments for a floating rate payments stream between two dissimilar counter-parties.

Options: An option is a financial agreement where a purchaser has the right to buy a cryptocurrency or a seller to sell a cryptocurrency at a preset price by a particular timeline.

Currently, there are only some cryptocurrency derivatives available for the public because of their infancy market. Among them, Bitcoin derivatives, Bitcoin options, and Bitcoin futures are the most common derivatives.  This is because Bitcoin controls more than 50% of the whole cryptocurrency market capitalization, making it the major as well as the most frequently traded cryptocurrency in the market.

Cryptocurrency derivatives are highly intricate financial products, which are used by technical or advanced investors. There are two major reasons for using these derivatives, which include:

1. They will offer the necessary safety from volatility

The primary reason for the subsistence of derivatives is for people and businesses to mitigate their risk exposure and safeguard themselves from any price fluctuations of the underlying cryptocurrency.

2. Potential losses can be avoided

If you are a Bitcoin investor, you will be capable of using Bitcoin derivatives to protect your investment portfolio, which is known as hedging. It usually involves taking steps to counterbalance potential losses. These derivatives will serve as an essential risk management tool for investors and institutions. The idea of hedging is like owning an insurance policy.

Traders, like you, will often use Cryptocurrency derivatives to speculate on the prices of your cryptocurrency. This is done with the major goal of yielding from the changes in the cost of the underlying cryptocurrency. For example, you may try to yield from an expected fall in the general prices of your cryptocurrency by shorting it. Shorting is also known as short selling, which refers to the betting act against the cost of a security. Speculation is habitually considered negatively for the reason that it adds a higher level of instability to the overall market.