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- Understanding the Number 13 in Crypto Futures Trading
The number 13 often carries superstitious connotations in many cultures, frequently associated with bad luck. However, in the world of crypto futures trading, “13” doesn’t signify misfortune but a specific, and potentially lucrative, contract expiry date on certain exchanges, most notably Binance Futures. This article will delve into the significance of the 13th of the month for futures traders, exploring its impact on funding rates, basis, liquidation events, and associated trading strategies. We will cover why it’s different, how to prepare for it, and how to potentially profit from the unique market dynamics it creates. This is aimed at beginners, so we’ll start with foundational concepts before moving into the specifics.
What are Crypto Futures?
Before we dive into the specifics of the 13th, let's quickly recap what crypto futures are. Unlike spot trading, where you buy and sell the actual cryptocurrency, futures contracts are agreements to buy or sell an asset at a predetermined price on a future date. These contracts allow traders to speculate on the future price movements of cryptocurrencies without actually owning the underlying asset. They also enable hedging of existing positions. Key concepts include:
- **Contract Size:** The amount of cryptocurrency represented by one contract.
- **Margin:** The amount of capital required to open and maintain a futures position. Leverage amplifies both potential profits and losses.
- **Mark Price:** The price used to calculate unrealized profit and loss, and to trigger liquidations. It's typically an average of several spot exchanges.
- **Liquidation Price:** The price at which your position will be automatically closed by the exchange to prevent losses exceeding your margin.
- **Funding Rate:** A periodic payment (positive or negative) exchanged between long and short positions, based on the difference between the
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