From the LBank blog.
Over the years, traditional derivatives have emerged as a prominent method for trading conventional assets through speculation on their future prices. The prevailing types of derivatives in contemporary markets include forwards, options, futures, and swaps. Although quantifying the precise value of the traditional derivatives market remains challenging, it is widely acknowledged to operate at a colossal scale, encompassing trillions of dollars in trading volume.
By utilizing traditional derivatives, it becomes feasible to anticipate the future decline in asset prices and procure a futures contract accordingly. This approach offers a distinct advantage over direct acquisition of substantial amounts of the assets, as derivative contracts enable individuals to reap the benefits of price fluctuations without the burden of physical ownership.
In crypto derivatives trading, any cryptocurrency token can serve as the underlying asset. When two parties engage in a financial contract, they engage in speculation regarding the future price of the cryptocurrency. Crypto futures involves selling or buying price for the cryptocurrency on a specific future date, independent of the prevailing market price. With crypto futures, traders can capitalize on fluctuations in the price of the underlying asset by acquiring the currency at a lower price and selling it at a higher price.
Since its launch in early 2023, LBank has achieved remarkable success, amassing a vast customer base of millions of users from diverse countries and regions across the globe.
As one of the leading platforms for crypto derivatives, LBank has consistently prioritized providing traders with an unparalleled trading experience. We are thrilled to offer the most extensive selection of futures products worldwide, ensuring that every user can discover their ideal solution for crypto futures trading on LBank. With over 150 trading pairs available, including LBank USDT-Ⓜ Futures and LBank USDC-Ⓜ Futures for cautious traders, as well as LBank Coin-Ⓜ Futures for crypto enthusiasts seeking to maximize profits through a passive income stream with minimal risk. This combined means we cater to a diverse range of trading preferences.
LBank offers a variety of derivative products to meet the trading needs of its users. These derivatives include quarterly futures contracts and perpetual futures contracts.
A quarterly futures contract provides traders with the opportunity to buy or sell an underlying asset at a predetermined price within a specified time frame. These contracts have a defined lifespan and follow a specific calendar cycle, resulting in their expiration. For example, let’s consider our BTC 0925 futures contract, which will expire three months after its issuance date.
In contrast, perpetual futures contracts, as the name suggests, do not have an expiration date. This means that traders are not required to monitor multiple delivery months, as is the case with quarterly futures contracts. For instance, a trader can maintain a short position indefinitely, unless they face liquidation.
- Sign up for a new LBank account or log in to your existing account to access the platform.
- On the main asset page, you have the option to Deposit funds or Transfer funds to your Futures account.
- Navigate to the Futures trading page and select your preferred trading pair from the available options.
- Customize your trading parameters, including margin mode, leverage ratio, desired price, and the number of contracts you wish to trade.
- Process to click on ‘Buy long’ or ‘Sell short’ to submit your order. Buying long allows you to profit from the asset’s price appreciation, while selling short enables you to benefit from price declines.
When trading Futures on LBank, you have two margin modes to choose from: Isolated Margin and Cross Margin.
- Isolated Margin mode divides your margin among individual positions. In the event that one position faces forced liquidation, your other positions remain unaffected. This feature simplifies margin management for single positions and is particularly recommended for beginners.
- Cross Margin mode establishes a margin pool that automatically allocates funds between positions. Excess margin can be transferred to riskier positions to avoid unwanted forced liquidations. This mode offers improved risk management for complex portfolios and is often preferred by long-term investors.
It is important to note that margin and leverage greatly amplify both profits and losses. We strongly advise conducting thorough research and implementing robust risk management strategies to safeguard your investments. For more detailed information on how to go about Futures Trading, head to our Futures Trading Home page.
Disclaimer: Derivatives are often volatile, and this can be a risky investment. The information provided in this article is solely for educational purposes and shouldn’t be regarded as financial advice.
This article came directly from the LBank blog, found on https://lbank-exchange.medium.com/cryptocurrency-futures-how-lbank-is-leading-the-way-a8fcc77233f9?source=rss-87c24ae35186——2