Delivery Futures

From Crypto trade
Jump to navigation Jump to search

🎁 Get up to 6800 USDT in welcome bonuses on BingX
Trade risk-free, earn cashback, and unlock exclusive vouchers just for signing up and verifying your account.
Join BingX today and start claiming your rewards in the Rewards Center!

Delivery Futures: A Beginner's Guide

Welcome to the world of cryptocurrency trading! This guide will walk you through a specific type of crypto futures contract called "Delivery Futures". Don't worry if you're completely new – we'll start with the basics and build from there. This article assumes you have a basic understanding of Cryptocurrency and Blockchain technology.

What are Futures Contracts?

Imagine you're a farmer who grows apples. You want to guarantee a price for your apples *today*, even though you won't harvest them for three months. You can make a deal with a buyer to sell your apples at a specific price on a specific date in the future. That deal is a "futures contract".

In the crypto world, a futures contract is an agreement to buy or sell a specific amount of a Cryptocurrency at a predetermined price on a future date. This date is called the "settlement date".

What are Delivery Futures?

Delivery Futures (also sometimes called "physical delivery futures") are a type of futures contract where, on the settlement date, the actual Cryptocurrency is *delivered* from the seller to the buyer. This is different from other types of futures like Perpetual Futures (explained later).

  • Example:* You buy a Delivery Futures contract for 1 Bitcoin (BTC) at a price of $70,000, with a settlement date in one month. If, on the settlement date, the price of BTC is $65,000, you've made a profit! You bought BTC for $70,000, but it's now worth $65,000. You receive 1 BTC, which you can then sell on an Exchange for $65,000. The reverse is true if the price goes up.

Key Terms

  • **Contract Size:** The amount of cryptocurrency covered by one contract. This varies depending on the exchange and the cryptocurrency.
  • **Settlement Date:** The date when the contract expires and the cryptocurrency is delivered (or the cash equivalent is exchanged).
  • **Margin:** The amount of money you need to have in your account to open and maintain a futures position. This is like a security deposit. Margin trading amplifies both profits and losses.
  • **Leverage:** A tool that allows you to control a larger position with a smaller amount of capital. Higher leverage means higher potential profits, but also higher potential losses. Be very careful with leverage!
  • **Long Position:** Betting that the price of the cryptocurrency will *increase*.
  • **Short Position:** Betting that the price of the cryptocurrency will *decrease*.
  • **Funding Rate:** (Less common in Delivery Futures, but good to know) A periodic payment between long and short positions, usually in Perpetual Futures.

Delivery Futures vs. Perpetual Futures

These are the two main types of futures contracts. Here's a quick comparison:

Feature Delivery Futures Perpetual Futures
Settlement Actual cryptocurrency delivered on a specific date. No delivery. Contracts are rolled over indefinitely.
Funding Rates Generally no funding rates. Usually have funding rates.
Expiration Date Has an expiration date. No expiration date.
Complexity Generally simpler to understand. Can be more complex due to funding rates and contract rollovers.

You can start trading Delivery Futures on Register now, Start trading and Join BingX.

How to Trade Delivery Futures: A Step-by-Step Guide

1. **Choose an Exchange:** Select a reputable Cryptocurrency Exchange that offers Delivery Futures. Some popular choices include Binance Futures, Bybit, and BitMEX BitMEX. 2. **Create and Verify Your Account:** You'll need to create an account and complete the verification process (KYC - Know Your Customer) to comply with regulations. 3. **Deposit Funds:** Deposit cryptocurrency (usually USDT or USDC) into your futures trading account. 4. **Select the Contract:** Choose the Delivery Futures contract for the cryptocurrency you want to trade (e.g., BTCUSD_DEC23 for Bitcoin with December 2023 settlement). 5. **Choose Your Position:** Decide whether to go "long" (buy) or "short" (sell). 6. **Set Your Leverage:** Carefully choose your leverage. Starting with low leverage (e.g., 1x or 2x) is recommended for beginners. 7. **Place Your Order:** Enter the quantity of contracts and set your order price. There are different order types, like Market Orders (executed immediately at the best available price) and Limit Orders (executed only at your specified price). 8. **Monitor Your Position:** Keep a close eye on your position and the price of the cryptocurrency. 9. **Close Your Position:** Before the settlement date, you need to close your position. If you don't, the contract will settle, and you'll either receive or deliver the cryptocurrency.

Risk Management

Trading Delivery Futures (and any type of futures) involves significant risk. Here are some crucial risk management tips:

  • **Use Stop-Loss Orders:** A stop-loss order automatically closes your position when the price reaches a certain level, limiting your potential losses.
  • **Don't Overleverage:** High leverage can amplify your losses quickly. Start with low leverage and gradually increase it as you gain experience.
  • **Diversify Your Portfolio:** Don't put all your eggs in one basket. Spread your investments across different cryptocurrencies and asset classes.
  • **Understand the Market:** Research the cryptocurrency you're trading and stay informed about market news and trends. Learn about Technical Analysis and Fundamental Analysis.
  • **Only Trade What You Can Afford to Lose:** Never invest more money than you can comfortably lose.

Advanced Concepts

  • **Contract Rollover:** Moving your position to a contract with a later settlement date.
  • **Basis Trading:** Exploiting the difference between the futures price and the spot price (the current market price).
  • **Calendar Spread:** Trading different contracts with different settlement dates for the same cryptocurrency.

Resources for Further Learning

Disclaimer

This guide is for informational purposes only and should not be considered financial advice. Trading cryptocurrencies is risky, and you could lose money. Always do your own research and consult with a financial advisor before making any investment decisions.

Recommended Crypto Exchanges

Exchange Features Sign Up
Binance Largest exchange, 500+ coins Sign Up - Register Now - CashBack 10% SPOT and Futures
BingX Futures Copy trading Join BingX - A lot of bonuses for registration on this exchange

Start Trading Now

Learn More

Join our Telegram community: @Crypto_futurestrading

⚠️ *Disclaimer: Cryptocurrency trading involves risk. Only invest what you can afford to lose.* ⚠️

🚀 Get 10% Cashback on Binance Futures

Start your crypto futures journey on Binance — the most trusted crypto exchange globally.

✅ 10% lifetime discount on trading fees
✅ Up to 125x leverage on top futures markets
✅ High liquidity, lightning-fast execution, and mobile trading

Take advantage of advanced tools and risk control features — Binance is your platform for serious trading.

Start Trading Now
Retrieved from "https://cryptotrade.cash/index.php?title=Delivery_Futures&oldid=480"