Bitcoin Futures Trading Guide
Understand what BTC futures are and how to use the leverage in futures to amplify your trading gains
Interested in trading BTC futures with Delta Exchange?
BTC Contracts Listed on Delta Exchange
BTC Contracts Listed on
Delta Exchange
Bitcoin futures enable you to take long (you profit when market goes up) and short positions (you profit when market goes down) on BTC. Futures have in-built leverage which acts as a multiplier to your returns.
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BTC Futures Contract Details
Contract Name
Description
Max. Leverage
Margin Currency
Taker Fees
Maker Fees
Contract Type
Contract Name
Description
Max. Leverage
Margin Currency
Taker Fees
Maker Fees
Contract Type
About Bitcoin
Bitcoin (BTC or XBT) is the most prominent cryptocurrency in the world. It is a decentralized digital currency that functions without a central bank or single administrator. Peer-to-peer exchange of bitcoin can happen without the need for intermediaries.
Bitcoin is also the largest cryptocurrency by market capitalisation as well as trading volumes. You can margin trade bitcoin on Delta Exchange using our derivative (i.e. futures and perpetual) contracts. This means that you can go long or short XBT with leverage.
What is Bitcoin Futures Trading?
Bitcoin Futures is an agreement between two parties to buy or sell Bitcoin at a predetermined future date and price. The futures contract derives its value from the underlying cryptocurrency, Bitcoin in this case. Thus the price of a Bitcoin futures contract moves broadly in sync with the price of Bitcoin.
Trading futures is thus an alternative to actually buying or selling the underlying crypto (aka spot trading). In spot trading, you can make profit by buying Bitcoin low and selling it at a high price. This trade however works only in a bull market, i.e. when Bitcoin price is going up. However, in a bear market, there is no trade possible in spot trading. Furthermore, leverage trading is not possible in spot trading.
Trading Bitcoin through futures offers several advantages over spot trading of Bitcoin, namely ability to both long or short and get access to leverage.
Trade profitably in all market conditions
You can profit from rising BTC price by going long Bitcoin futures. And, when BTC price is falling, you can make profits by going short. This feature of futures trading enable you to navigate all types of market conditions profitably. Compare this with directly buying Bitcoin. When price is falling, you can either sell your Bitcoin or suffer losses. In spot trading, there is no way of profiting from falling prices.
Hedge Price Risk
If you are a HODLer, you can still use futures to mitigate price risk. Say, you hold BTC. You can mitigate the risks you face when Bitcoin is falling by going short BTC futures. In this case, a short futures position acts as a downside protection by effectively locking the $ value of your portfolio without the need for selling your Bitcoin. Judicious use of futures as hedge can make you a better and stronger HODLer.
Amplify trading gains with leverage
Leverage enables you to open positions that are bigger than your trading capital. If you can open a position that is 10 times bigger than your trading capital, then you have 10x leverage available to you. The maximum allowed leverage for futures listed on Delta Exchange is as high as 100x. There are two ways of thinking about leverage:
  • Leverage as capital efficiency driver : For opening a position of a given size, higher the leverage lower the trading capital required. The leverage in spot trading is always 1x, while it is 3-4x in margin trading. This means futures is 20 to 100 times more capital efficient than spot or margin trading.
  • Leverage as a returns amplifier : Because in a leverage trade position size is greater than the capital deployed, impact of prices moves gets magnified. The return on capital deployed is leverage times the price return. This means that you can amplify your trading gains the effective use of leverage.
If BTC increased from $100 to $101.25 your return would be equal to:
+1.25%
Without leverage
+12.5%
With 10x leverage
+25%
With 20x leverage
+31.25%
With 25x leverage
Benefits of Trading BTC Through Futures
Magnify returns through leverage
In-built leverage magnifies impact of BTC price moves on your return on capital.
Trading both rising & falling markets
Long when bullish. Short when bearish. Trade all market conditions profitably.
Trade more with less
Deploy the capital freed up by using leverage in other trading opportunities
Why Trade BTC Futures on Delta Exchange
Why Trade BTC Futures on
Delta Exchange
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1

Increase profitability
Low trading fees, tight spreads & deep order books of our BTC contracts increase profitability of your trades
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2

Improve risk management
Set TP / SL with your order, Leverage advanced order types and instruments (Options, Interest Rate Swaps) to create hedging strategies
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3

Identify better trades
Use professional charts & advanced analysis tools to quickly identify trading opportunities
Have a Question About Trading BTC Futures?
What are the pros and cons of trading bitcoin futures vis-a-vis trading bitcoin options?
Futures have No Time Decay (Options are wasting assets meaning that their value reduces as expiry approaches given all else remains same), Liquidity (Future markets have deep and reliable liquidity as compared to options), Pricing easy to understand (If the spot and futures prices are out of alignment, arbitrage activity would occur and rectify the imbalance).