A Quick Guide on Crypto Futures: What You Should Know
— Asset, Short, Money, Crypto, Quick, Price, Trading, Assets, Contract, Futures — 1 min read
Futures are financial contracts that obligate an investor to buy or sell an asset at a predetermined price and future date. The general public confuses futures with options, but they are completely different instruments with distinct advantages and disadvantages. A crypto futures contract represents a certain amount of bitcoin or ether. A similar concept is a commodity index or derivative contract, in which an investor assumes a risk associated with the future value of a commodity. Crypto futures stand out to investors because most marketplaces offer the use of leverage, which magnifies their opportunity for gain or loss. Investors can also lose money on the purchase price of the contract, and rather than simply taking a percentage loss on the underlying asset’s price, they could take a 100% loss. Source