Perhaps the most elemental rule in the world of crypto trading is buying when prices are low and selling as their value hits the graph high. However, just like the stock market, this practice has its own pros and cons. But there is a catch. The crypto market is highly volatile. None can guarantee you that the most popular cryptocurrency Bitcoin (BTC), is not ephemeral. In such a roller coaster ride traders find themselves in an imbroglio, which cryptocurrency they should give a nod to.
What if we tell you that you can reserve your preferred cryptocurrency at its price today to buy anytime in the future? Yes, with crypto derivatives trading it is possible. Crypto derivatives are a burning topic in the crypto sphere. In this article, we will give you a comprehensive guide on how you can start your crypto journey in just 30 seconds with Delta Exchange. Let’s head ahead!
Introduction to Crypto Derivatives Trading
In layman’s words, a derivative is a financial contract or product whose value is calculated by an underlying asset. To elaborate it we can say, the buyer and seller come into an agreement predicting the future value of an underlying asset. The buyer predicts the value of the underlying asset will decrease than its value today. Whereas the seller hopes the value of the underlying asset will increase than its present value. If the former case happens, the buyer stays in profit. If the latter case happens, the seller stays in profit.
In case of crypto derivatives trading, the underlying asset is simply any cryptocurrency. Two parties enter the contract speculating the price of the underlying cryptocurrency in the future. Such contracts represent the fact that the underlying crypto asset can be sold and bought in the predetermined time in the future at its predetermined price. Let’s understand crypto derivatives trading with an example.
Suppose you want to buy a dress worth 5 BTC. But you believe that its price will increase after Christmas. However, the seller thinks the price of the dress will decrease with the end of Christmas. So, you and the seller come into a financial agreement that on 27th December you will buy the dress at 5 BTC. The seller agrees to reserve the dress for you until then at a non-refundable cost of 1 BTC. Now, as 27th December approaches, if the price of the dress becomes 7 BTC, then the seller is bound to sell the dress to you at 5 BTC. So, you are on profit in that case. However, if the price of the dress decreases to 4 BTC, then too, you will have to buy it for 5 BTC. In that case, the seller earns a profit of an extra BTC.
Now, you might be thinking that it’s quite risky to bet on the price of a crypto asset in the future in a highly volatile market like crypto. Crypto verse and the risk factor go side by side. However, crypto derivatives trading even has an option of a specific type of financial contract where you can back off from the contract if you see you are going to face loss. For instance, in the above given example, if you chose the specific type of crypto dedicated trading, either you or the seller could back off from buying or selling the dress if any of you found yourself at a loss. So, what is that specific type of crypto derivatives trading and where can you opt it out? Let’s have a look.
Crypto Derivatives Trading Methods Offered by Delta Exchange
Delta Exchange is the best and fastest growing crypto derivatives trading platform. On Delta you can opt out of the following crypto derivatives trading methods:
Future Contract: Basic Crypto Derivatives Trading Method
Futures contracts are financial contracts to buy and sell a crypto asset at a predetermined price in pre-decided future time. This method of crypto derivatives trading has no option for either party to back off from the contract. There is no option of any type of customization in this type of crypto derivatives trading. Futures contracts are used to lock profit while trading in highly volatile sections of the crypto-verse. The price of the underlying crypto asset in this crypto derivatives trading method is calculated by taking the aggregated indices that represent each crypto asset on various exchange platforms.
On Delta Exchange, you can try Future Contracts having Bitcoin or 13 types of altcoins as the underlying asset. The 13 types of altcoins are Ether (ETH), Ripple (XRP), Stellar Lumens (XLM), Binance Coin (BNB), UNUS SED LEO (LEO), Litecoin (LTC), Tezos (XTZ), ATOM, Bitcoin Cash (BCH), Bitcoin Cash SV (BSV), NEO, Monero (XMR) and Basic Attention Token (BAT). You can have up to 100x leverage (BTC and ETH) and 20x leverage (for all other futures) while opting for this type of crypto derivatives trading method on Delta Exchange.
Options are the type of crypto derivatives trading method that allows either the buyer or seller to back off from the financial contract if either of them finds themselves facing a loss to fulfill the contract. Therefore, Options can be called Futures but without the term of any type of obligation. However, you won’t get the premium or fees that you pay to reserve the crypto asset even if you choose to back off from buying the crypto asset on the trading day. Options are of the following two types:
It gives the right to buy at a strike/predetermined price.
It gives the right to sell at the strike/predetermined price.
Delta Exchange is one of the few mainstream Crypto exchange platforms that allow you to opt out of this type of crypto derivatives trading method. You can choose Options on Delta for over 5 crypto assets.
Guide to Sign Up on Delta Exchange
Follow the steps below to start your crypto journey in 30 seconds with Delta Exchange:
Step 1: Go to the official website of Delta Exchange
Step 2: Click on the option “Sign Up”
Step 3: Fill in the required details
Step 4: Start using the best crypto derivatives trading methods with up to 100x leverage
Should You Try Crypto Derivatives Methods?
The answer, in a nutshell, is, yes. The cryptocurrency market is highly volatile. Therefore, no matter which type of crypto derivatives trading method you choose, being cautious is a must. Choosing a market leader like Delta Exchange ensures that you take the best possible high class security measures while choosing any type of crypto derivatives trading method.
Crypto derivatives trading methods allow you to decrease the volatility you face in the market and boost your trading experience by offering high leverages.
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