Bitcoin futures trading picture

Where can I trade Bitcoin futures? What is a Bitcoin future?

In this crypto trading guide we will discuss where to trade Bitcoin futures and what  Bitcoin futures are.

Bitcoin futures are very popular among cryptocurrency traders because they allow for large leverage trading. Leverage trading comes with huge potential but also a lot of risks.

There are many of the top Bitcoin trading sites offering futures trading but we will only list the very best in this article.

What are Bitcoin futures?

Bitcoin futures are a category of crypto trading instruments.

Basically, Bitcoin futures allow investors to speculate on the future price of Bitcoin. Investors can get exposure to Bitcoin, or any cryptocurrency, without having to own the underlying asset.

  • By going long on Bitcoin futures you commit to buy Bitcoin at a certain price, at a certain date, in the future.
  • By going short on Bitcoin futures you commit to sell Bitcoin at a certain price, at a certain date in the future.

Some important terms to know about Bitcoin Futures

  • Cash Settlement – Is a settlement method used in futures where, upon expiration date, the seller of the financial instrument does not deliver the actual (physical) underlying asset but instead transfers the associated cash position.
  • Collateral (Initial margin) – The collateral is the cash deposited in the account or securities provided, and represents the funds available to the account holder for further trading. Example: If you buy Bitcoin futures with $1.000 and 3x leverage, your position is worth $3.000 but you collateral is $1.000. If Bitcoin decreases 10% in price and your position is worth $2.700, your collateral is $700. 
  • Margin call – A margin call occurs when the value of an investor’s margin account falls below the required amount. The required amount is different for different trading sites but you will be asked to deposit more funds.
  • Force liquidation – Force liquidation happens when your margin is below a certain level. This level is lower than the level for margin call.
  • Settlement currency – The cash settlement will be transferred in the settlement currency.

Where can I trade Bitcoin futures?

There are many great crypto trading sites where you can trade Bitcoin futures. However, many of them you should avoid since they charge large fees or large spreads. You should go for one of the well-known crypto trading sites. In this article we list

  • Bitfinex
  • Binance
  • BitMEX

As you can see in the screenshot below all these 3 trading sites are represented among the top 14 derivative trading platforms, by trading volume. Also, the maker and taker fees are presented.

Bitfinex Bitcoin futures

Bitfinex futures trading feature is competitive when it comes to trading volume and trading fees.

As you could see in the previous screenshot from Coinmarketcap, Bitfinex is on the 14th place regarding crypto derivative trading volume.

Bitfinex has among the best maker fee while the taker fee is among the highest in the screenshot.

  • Bitfinex derivative trading volume: $26.000.000
  • Bitfinex maker fee: -0.02%
  • Bitfinex taker fee: 0.075%
The fees are always more complicated than one flat fee. Usually, crypto trading sites charges trading fees on different levels dependent on how much your trading volume was the last 30 days.

Binance Bitcoin futures

Binance offers two different types of futures, Quarterly and Perpetual.

With Quarterly futures the used margin is BTC, the contracts are settled in BTC and the trading fees are paid in BTC. This means that you have to commit Bitcoin to your initial margin, which is the same as your collateral.

For Binance perpetual contracts the used margin margin can be both Bitcoin and USDt. In the Binance trading interface these two options are separated as USDt futures and Coin futures.

You can see all the different Binance derivative trading instruments at Coingecko derivatives.

  • Binance derivative trading volume: $
  • Binance maker fee: 0.02%
  • Binance taker fee: 0.04%
Binance trading fees are dependent on the trading volume and your loyalty level. In addition, you can get lower fees if you pay them in their native token, Binance Coin (BNB).

Binance Referral Code: -20% on all commissions with our link

BitMEX Bitcoin futures

BitMEX offers some different derivative futures contracts with cash settlement. All margin on BitMEX is denominated in Bitcoin. This means that you can speculate on the future value of different cryptocurrencies but the payments are settled in Bitcoin.

There are three different futures contracts on BitMEX, quanto, linear and inverse.

  • BitMEX derivative trading volume: $2.800.000.000
  • BitMEX maker fee: -0.025%
  • BitMEX taker fee: 0.075%

BitMEX Quanto futures

The quanto futures contract on BitMEX the underlying is denominated in one currency, but the instrument itself is settled in another currency. There is a fixed rate between the denominated currency and the settlement currency. BitMEX offers Quanto Futures Contracts in US Dollars and Tether. This allows exposure to the US Dollar or Tether price of an asset, without needing to hold US Dollars / Tether or the asset directly.

BitMEX Linear futures

The price of a BitMEX linear contract is expressed as the price of the underlying against XBT. To help users understand the USD price of linear contracts, the dollar value is shown in grey in the Contract Details. This is calculated by multiplying the contract price by the .BXBT price. BitMEX offers Linear Futures Contracts in Bitcoin. This allows exposure to the price of an asset, without needing to hold the asset directly as it only requires Bitcoin as margin.

BitMEX Linear futures

An inverse contract is worth a fixed amount of the quote currency. In XBT futures’ case, each contract is worth $1 of Bitcoin at any price. XBT futures are inverse contracts because they are quoted as XBT/USD but the underlying is USD/XBT or 1 / (XBT/USD). They are quoted as an inverse to facilitate hedging US Dollar amounts while the spot market convention is to quote the number of US Dollars per Bitcoin.

This product is suitable for traders who need to lock in a USD value of Bitcoin. If you were due to receive $100,000 of Bitcoin in three months, you would sell 100,000 XBT futures contracts to lock in the Bitcoin value.

Share on facebook
Share on pinterest
Share on twitter
Share on linkedin