Enjoy Commission Free Crypto Trading With Digitex Futures 1

Enjoy Commission Free Crypto Trading With Digitex Futures

Digitex Futures
Trading
• Digitex
April 6, 2021

Digitex Futures is proudly the world’s first commission-free cryptocurrency futures trading platform. Thanks to its one-of-a-kind feature in the blockchain industry, market participants can pursue high-frequency trading strategies that were impossible to perform before. By disrupting the status quo, anyone can now become a consistently profitable trader. 

Creating the Path to Profitability

After spending most of his professional career on the floor of the London International Financial Futures & Options Exchange (LIFFE), Digitex Futures’ CEO Adam Todd had the vision to create a trading platform that completely eliminates all fees. The idea was to provide the nascent cryptocurrency industry with an enterprise-grade futures exchange that would enable any trader in the world to participate in the blockchain revolution. 

Todd understood that newcomers would not only be discouraged by the lack of sufficient liquidity in the cryptocurrency market and the complexity around handling these digital assets but also by the high fees that can completely remove a trader’s edge. As a result, the British entrepreneur decided to level the playing field for the average futures trader by creating a state-of-the-art, user-friendly, and zero-fee crypto futures exchange

The current core strategy that most of the renowned cryptocurrency futures exchanges in the market use to generate profits was created around the idea that a “middleman” is entitled to a fee or commission to provide its services. For instance, an average taker fee is roughly 0.075%, so traders using 100x leverage have to pay a massive 7.50% commission of their margin on every single trade. 

As the world transitions from centralized finance (CeFI) into decentralized finance (DeFi), such an unjust business model that comes at the expense of traders is now obsolete. 

Digitex Futures operates on a winning formula where all commissions and fees are eliminated, making it easy for traders to make money using high-frequency trading strategies. For the first time ever, cryptocurrency enthusiasts can engage in highly active and short-term trades without being penalized by volume-based commissions that make it impossible to make a profit. Anyone can now take single-tick profits and losses without any edge working against them. 

Instead of taking advantage of active traders, Digitex Futures actually rewards them by removing all maker and taker fees and implementing automated market makers’ software. This breakthrough innovation fundamentally changes the blockchain industry’s dynamics, and sooner rather than later other exchanges will have no choice but to follow suit. 

While others try to catch up with Digitex Futures’ zero-fee business model, market participants are welcome to grind out consistent small profits that do not get eaten up by fees using a rapid-fire trading ladder.

Those who have not signed up yet to Digitex Futures can do so easily by clicking the link here. It is time to start making money on cryptocurrency futures whether the market goes up or down. Sign up and take advantage of the world’s first commission-free cryptocurrency futures trading platform.

April 6, 2021
Digitex Futures
Trading

Enjoy Commission Free Crypto Trading With Digitex Futures

Digitex
Enjoy Commission Free Crypto Trading With Digitex Futures 2

Digitex Futures is proudly the world’s first commission-free cryptocurrency futures trading platform. Thanks to its one-of-a-kind feature in the blockchain industry, market participants can pursue high-frequency trading strategies that were impossible to perform before. By disrupting the status quo, anyone can now become a consistently profitable trader. 

Creating the Path to Profitability

After spending most of his professional career on the floor of the London International Financial Futures & Options Exchange (LIFFE), Digitex Futures’ CEO Adam Todd had the vision to create a trading platform that completely eliminates all fees. The idea was to provide the nascent cryptocurrency industry with an enterprise-grade futures exchange that would enable any trader in the world to participate in the blockchain revolution. 

Todd understood that newcomers would not only be discouraged by the lack of sufficient liquidity in the cryptocurrency market and the complexity around handling these digital assets but also by the high fees that can completely remove a trader’s edge. As a result, the British entrepreneur decided to level the playing field for the average futures trader by creating a state-of-the-art, user-friendly, and zero-fee crypto futures exchange

The current core strategy that most of the renowned cryptocurrency futures exchanges in the market use to generate profits was created around the idea that a “middleman” is entitled to a fee or commission to provide its services. For instance, an average taker fee is roughly 0.075%, so traders using 100x leverage have to pay a massive 7.50% commission of their margin on every single trade. 

As the world transitions from centralized finance (CeFI) into decentralized finance (DeFi), such an unjust business model that comes at the expense of traders is now obsolete. 

Digitex Futures operates on a winning formula where all commissions and fees are eliminated, making it easy for traders to make money using high-frequency trading strategies. For the first time ever, cryptocurrency enthusiasts can engage in highly active and short-term trades without being penalized by volume-based commissions that make it impossible to make a profit. Anyone can now take single-tick profits and losses without any edge working against them. 

Instead of taking advantage of active traders, Digitex Futures actually rewards them by removing all maker and taker fees and implementing automated market makers’ software. This breakthrough innovation fundamentally changes the blockchain industry’s dynamics, and sooner rather than later other exchanges will have no choice but to follow suit. 

While others try to catch up with Digitex Futures’ zero-fee business model, market participants are welcome to grind out consistent small profits that do not get eaten up by fees using a rapid-fire trading ladder.

Those who have not signed up yet to Digitex Futures can do so easily by clicking the link here. It is time to start making money on cryptocurrency futures whether the market goes up or down. Sign up and take advantage of the world’s first commission-free cryptocurrency futures trading platform.

Latest News

crypto

High Interest in Crypto Derivatives is Bullish for DGTX

Trading
• Ali Martinez
May 12, 2020

The crypto derivatives market has grown in popularity over the years. As institutional investors flock to the industry, there has been an increasing demand for crypto futures, options, and swaps offerings. Indeed, new volume records are being set constantly due to the interest for such financial products.

Data from Skew reveals that despite the high levels of volatility seen recently as speculation mounted regarding Bitcoin’s halving, the aggregate BTC futures volume today accounts for more than $35 billion. 

Huobi is currently leading the charts with a trading volume of $8.2 billion in the past 24 hours. The Singapore-based cryptocurrency exchange is followed by OKEx and Binance, which reported volumes of $7.2 billion and $6.7 billion, respectively. 

Once known as the king of the crypto derivatives market, BitMEX has fallen down to the number four spot with BTC futures volumes of $5 billion. This cryptocurrency platform may have put a permanent stain on its reputation after the massive collapse of its liquidation engine during Black Thursday in March. 

High Interest in Crypto Derivatives is Bullish for DGTX 3

BTC Futures Volumes. (Source: Skew)

Regardless, the popularity of all of these industry leaders may enter a downward trajectory as Digitex Futures is set to disrupt the entire crypto derivatives sector. 

A New Player on the Block

The new trading platform led by Adam Todd will introduce a zero-fee trading structure into the crypto derivatives market. The commission-free exchange will enable traders and market participants alike to speculate on the future price of a given asset without taking a percentage of their profits. 

When taking into consideration the current industry leaders — Huobi, OKEx, Binance, and BitMEX — they all charge considerable trading fees. Although their fee structure may seem meaningless, it makes trading strategies like scalping impossible since profits are slowly eaten up by commission fees. 

The world’s largest cryptocurrency exchange by trading volume, Binance, for instance, charges a maker fee of 0.02% and a taker fee of 0.04% on its crypto derivatives trading platform, Binance Futures. While this may not look like much at a first glance, when trades are being made using 100x leverage, that quickly becomes 2% to enter and 4% to exit a position. 

These fees are even more significant in Huobi, OKEx, and BitMEX, which are charging 0.2%, 0.1%, and 0.075%, respectively. When added up, these commissions have the ability to wipe out a trader’s small profits.

Unlike any of these cryptocurrency exchanges, Digitex Futures will allow anyone to place as many long or short positions as they wish over and over again without incurring a single fee. This is a clear advantage for traders who want to capitalize even on the smallest market fluctuations. And, it will certainly open the gates to a new wave of demand for the DGTX token, which makes all of the above possible. 

Demand for DGTX Is Expected to Rise

Having the possibility to profit in every single movement of the market will even get the average Joe interested in trading. As users of Digitex Futures will rely on DGTX to have access to the platform, the demand for this utility token will likely shoot up. 

Such a bullish outlook coincides with what can be seen from a technical perspective.

The Tom Demark (TD) Sequential indicator is currently presenting a buy signal on DGTX’s 1-day chart. The bullish formation developed in the form of a red nine candlestick. Due to the recent price action, however, it transitioned into a green one candle. 

The aforementioned technical index estimates that a further increase in the buying pressure behind DGTX will validate the optimistic outlook. If so, this altcoin could be poised to surge for one to four daily candlesticks or begin a new upward countdown. 

High Interest in Crypto Derivatives is Bullish for DGTX 4

TD Setup Presents a Buy Signal For DGTX. (Source: TradingView)

Adding credence to the bullish outlook, the corrective phase that DGTX went through since early April allowed it to hit the 50% Fibonacci retracement level. Although DGTX barely touched the 38.2% Fibonacci retracement level as forecasted last week, around the 50% Fibonacci retracement level is where most of the price action took place.

Based on Gann’s 50% retracement theory, this Fibonacci level presents a crucial opportunity to “buy the dip.” If DGTX is able to bounce off this area with enough volume behind it, it could rapidly rise and reach higher highs. 

Otherwise, it may present another opportunity for sidelined investors to get back into the market. 

High Interest in Crypto Derivatives is Bullish for DGTX 5

DGTX Bounces Off the 50% Fib Level. (Source: TradingView)

With Bitcoin’s halving now written into the history books and Digitex Futures preparing to launch fully to the public this summer, it is just a matter of time before DGTX achieves its upside potential leaving competitors in the dust. 

 

May 12, 2020
Trading

High Interest in Crypto Derivatives is Bullish for DGTX

Ali Martinez
crypto

The crypto derivatives market has grown in popularity over the years. As institutional investors flock to the industry, there has been an increasing demand for crypto futures, options, and swaps offerings. Indeed, new volume records are being set constantly due to the interest for such financial products.

Data from Skew reveals that despite the high levels of volatility seen recently as speculation mounted regarding Bitcoin’s halving, the aggregate BTC futures volume today accounts for more than $35 billion. 

Huobi is currently leading the charts with a trading volume of $8.2 billion in the past 24 hours. The Singapore-based cryptocurrency exchange is followed by OKEx and Binance, which reported volumes of $7.2 billion and $6.7 billion, respectively. 

Once known as the king of the crypto derivatives market, BitMEX has fallen down to the number four spot with BTC futures volumes of $5 billion. This cryptocurrency platform may have put a permanent stain on its reputation after the massive collapse of its liquidation engine during Black Thursday in March. 

High Interest in Crypto Derivatives is Bullish for DGTX 6

BTC Futures Volumes. (Source: Skew)

Regardless, the popularity of all of these industry leaders may enter a downward trajectory as Digitex Futures is set to disrupt the entire crypto derivatives sector. 

A New Player on the Block

The new trading platform led by Adam Todd will introduce a zero-fee trading structure into the crypto derivatives market. The commission-free exchange will enable traders and market participants alike to speculate on the future price of a given asset without taking a percentage of their profits. 

When taking into consideration the current industry leaders — Huobi, OKEx, Binance, and BitMEX — they all charge considerable trading fees. Although their fee structure may seem meaningless, it makes trading strategies like scalping impossible since profits are slowly eaten up by commission fees. 

The world’s largest cryptocurrency exchange by trading volume, Binance, for instance, charges a maker fee of 0.02% and a taker fee of 0.04% on its crypto derivatives trading platform, Binance Futures. While this may not look like much at a first glance, when trades are being made using 100x leverage, that quickly becomes 2% to enter and 4% to exit a position. 

These fees are even more significant in Huobi, OKEx, and BitMEX, which are charging 0.2%, 0.1%, and 0.075%, respectively. When added up, these commissions have the ability to wipe out a trader’s small profits.

Unlike any of these cryptocurrency exchanges, Digitex Futures will allow anyone to place as many long or short positions as they wish over and over again without incurring a single fee. This is a clear advantage for traders who want to capitalize even on the smallest market fluctuations. And, it will certainly open the gates to a new wave of demand for the DGTX token, which makes all of the above possible. 

Demand for DGTX Is Expected to Rise

Having the possibility to profit in every single movement of the market will even get the average Joe interested in trading. As users of Digitex Futures will rely on DGTX to have access to the platform, the demand for this utility token will likely shoot up. 

Such a bullish outlook coincides with what can be seen from a technical perspective.

The Tom Demark (TD) Sequential indicator is currently presenting a buy signal on DGTX’s 1-day chart. The bullish formation developed in the form of a red nine candlestick. Due to the recent price action, however, it transitioned into a green one candle. 

The aforementioned technical index estimates that a further increase in the buying pressure behind DGTX will validate the optimistic outlook. If so, this altcoin could be poised to surge for one to four daily candlesticks or begin a new upward countdown. 

High Interest in Crypto Derivatives is Bullish for DGTX 7

TD Setup Presents a Buy Signal For DGTX. (Source: TradingView)

Adding credence to the bullish outlook, the corrective phase that DGTX went through since early April allowed it to hit the 50% Fibonacci retracement level. Although DGTX barely touched the 38.2% Fibonacci retracement level as forecasted last week, around the 50% Fibonacci retracement level is where most of the price action took place.

Based on Gann’s 50% retracement theory, this Fibonacci level presents a crucial opportunity to “buy the dip.” If DGTX is able to bounce off this area with enough volume behind it, it could rapidly rise and reach higher highs. 

Otherwise, it may present another opportunity for sidelined investors to get back into the market. 

High Interest in Crypto Derivatives is Bullish for DGTX 8

DGTX Bounces Off the 50% Fib Level. (Source: TradingView)

With Bitcoin’s halving now written into the history books and Digitex Futures preparing to launch fully to the public this summer, it is just a matter of time before DGTX achieves its upside potential leaving competitors in the dust. 

 

Latest News

Futures vs. Options - Which Should You Trade? 9

Futures vs. Options – Which Should You Trade?

Digitex Futures
Trading
• Sarah Rothrie
August 5, 2019

Futures and options are both financial derivatives traded by institutions and individuals, either to turn a profit or to hedge against current investments. Some traders like to trade both, while some have a preference for one over the other. When you weigh up your own trading choices between futures vs. options, you must understand the pros and cons of each. 
That’s where we come in. In this guide, we’ll deep-dive into the features of futures and options contracts, take a look at how they originated and how today’s traders across different markets use them. We’ll also compare the opportunities and risks of both stock futures trading and options contracts and examine the current state of the crypto-derivatives markets. 

What is a Futures Contract? 

When you hear the terms “futures” and “futures contract,” they mean one and the same thing. A futures contract is a simple legal agreement between two parties that a particular asset or commodity will be sold at a pre-agreed price on a specific date in the future. 
Futures are one of the oldest forms of derivatives, and their origins offer a simple way of explaining how futures work. Futures emerged as a means of farmers hedging against the future value of their crops. At the start of the growing season, the farmers couldn’t predict whether or not they would have a good or a bad harvest, as it would depend on factors such as the weather.
Similarly, imagine a baker buying the wheat from the farmer on the other side of the transaction – they were subject to the same uncertainty. So, the farmers and the bakers would agree on a price for the harvest at the start of the season.
According to the laws of supply and demand, a good harvest would increase supply, and push down the price of the wheat. Conversely, a poor harvest creates a shortage, driving demand, and wheat prices high. By entering into a futures contract, the farmers and the bakers could hedge their overall risk by agreeing on the harvest price upfront.
Although the markets have evolved, the nature of futures contracts remains the same. Today’s futures markets consist of hedgers and speculators. Hedgers are the parties with commodities or assets to sell who want to secure an agreed price. Speculators are those trade futures contracts against the value of the asset without ever planning to take custody of the asset itself. 
The financial markets are filled with jargon, so you may come across different terms and be left wondering “what are stock futures?” or “what are forex futures?” Rest assured that the explainer given here applies to any futures market, whether the underlying asset is stocks, fiat currencies, cryptocurrencies, or commodities like oil, metals, or utilities. 
So now that you’ve had a futures contract explained, how does an options contract work? 

What is an Options Contract?

A critical difference between futures and options is that an options contract doesn’t represent a legal agreement to buy or sell. An options contract creates a right, not an obligation, to enter into a trade before a fixed date at which the contract expires. 
Options contracts are of two types. A call option is a contract that allows the trader to buy a particular asset at a fixed price, called the strike price before the contract expires. Let’s say someone opens a call option to buy BTC at $10k with an expiry date at the end of 2020.
If BTC goes up to $15k, the trader can buy the BTC at $10k and immediately sell on the open market at $15k, realizing a $5k profit on the transaction. They could also sell the option contract itself, as it already represents a profit. 
The other type of option is a put option, which works in exactly the same way except it represents a sell transaction rather than a buy transaction. 
Like futures contracts, options contracts have a long and rich history, stretching all the way back to Ancient Greece. Aristotle provides a great example of options contracts in action at the time. He wrote of a poor philosopher called Thales, who made his wealth by forecasting the future year’s olive harvest. 
Thales made agreements with the olive press owners for the option to use their olive presses at a fixed value. The next year, there was a bountiful olive harvest. Due to the increased demand for olive presses, Thales was able to sell his “olive press options” for a profit.  

What is the Difference Between Futures and Options?

So, now we’ve covered the difference between futures and options on a mechanical level, what are the differences between future and options in a trading scenario?
Buying options offer a more conservative approach to trading. When buying options, the trader can never lose more than their initial investment, known as the premium. The premium value may vary depending on the difference between the option strike price and the actual asset price and the time left before the option expiry.
Regardless of whether the asset price falls way below the premium, the trader doesn’t lose any more than this value. This applies if they can’t sell the option and choose not to exercise their right to buy. 
The option seller faces far more risk, as they must honor the agreement to sell the options at the strike price. Selling (also called writing) options can lead to very high losses in volatile markets and are best left to the most experienced institutional options traders. 
Futures represent a legally binding agreement to buy an asset; therefore, they carry more risk as the trader cannot simply choose not to fulfill the trade. Furthermore, profits and losses are directly linked to the value of the asset with no premium to offset the downside. 
Conversely, though, trading futures offers the opportunity for far higher returns than trading options. Trading futures on margin amplifies the potential for even bigger profits, and losses, with futures trading. 
Options trading can be more complicated to understand than futures trading. However, once the basics are in place, options represent a solid choice for a newer trader. Because the risk exposure on a call option is limited to the premium paid, a trader can get away with understanding less about the market itself. 
On the other hand, experienced traders who know their markets well tend to opt for futures vs. options. If you’ve spent long enough understanding the markets for a particular asset, then you’re more likely to turn a bigger profit using leveraged futures contracts than with options. 

Markets for Futures and Options

You can trade futures and options across a wide variety of markets. These include:

  • Stocks such as Apple, Google or any publicly-traded company
  • Indices such as the S&P 500 or the DJI
  • Foreign currencies
  • Commodities such as precious metals, oil, and gas, or agricultural products
  • Cryptocurrencies such as Bitcoin or Ether

Trading in these markets can happen both over-the-counter and in exchanges. 
In the traditional financial markets, there is an even broader range of financial derivatives, including forwards and swaps covering a variety of assets. However, in the cryptocurrency space, it’s the futures contract that currently reigns supreme. 

The Burgeoning Crypto-Derivative Market

A vast market for cryptocurrency derivatives has emerged over the last year or two. BitMEX first opened its doors in 2014, but the CME and the Cboe started offering bitcoin futures contracts to institutional clients in December 2017. The primary attraction in trading cryptocurrency derivatives is that the markets are more volatile. This volatility provides the opportunity for traders to realize far more significant gains than in traditional markets, which are more stable. Futures trading also provided the first means of going short on bitcoin. 
At this point in 2019, there are more exchanges to choose from if you want to trade cryptocurrency futures. BitMEX still dominates, but there are plenty of other choices, including Deribit, Bybit, and Cryptofacilities. Many existing cryptocurrency exchanges have expanded into futures too, including OKEx, Huobi and soon, Binance. 
Once Digitex launches, we aim for our zero-commission, decentralized futures exchange to outrank each of them on factors including fees, leverage, security, and liquidity. With the crypto futures markets at an all-time high, there’s no better time than now for new entrants to emerge. 
At the time of writing, the only exchange offering cryptocurrency options is Deribit. This makes the market for options far more limited than futures.  
At Digitex, we firmly believe that futures are the superior choice, particularly for more experienced and regular cryptocurrency traders. They were the first crypto-derivative to emerge, they provide the opportunity for the highest returns, and they have strong institutional and retail support. While the prospects for cryptocurrency options trading remain limited, liquidity will continue to be a challenge. Of course, things could change if more exchanges start offering options. 

Knowledge is Power

So, what about newcomers to the markets, or those who don’t trade so regularly? Well, there are no barriers to entry. However, newcomers to all kinds of trading should take steps to ensure they are educating themselves about the futures trading basics, such as types of instruments on offer and the markets for the underlying assets. 
It will also help to gain an understanding of the principles of technical and fundamental analysis which traders use to read and forecast market fluctuations. Furthermore, all traders, whether newcomers or the most experienced, should have an understanding of their own appetite for risk, and know when to exit a losing trade. 
Following these principles will serve you well, whether you choose to trade spot or derivatives, crypto or stocks, want to make a living trading futures or just trade for fun on the side, or engage in day trading or long term investing. If you want to learn more, the Digitex blog is a great place to start. We’ve published many informational articles which explain futures trading in-depth, covering jargon, strategy, analysis, trading versus investing, and much more. In trading as in life, knowledge is power. 
 
 

August 5, 2019
Digitex Futures
Trading

Futures vs. Options – Which Should You Trade?

Sarah Rothrie
Futures vs. Options - Which Should You Trade? 10

Futures and options are both financial derivatives traded by institutions and individuals, either to turn a profit or to hedge against current investments. Some traders like to trade both, while some have a preference for one over the other. When you weigh up your own trading choices between futures vs. options, you must understand the pros and cons of each. 
That’s where we come in. In this guide, we’ll deep-dive into the features of futures and options contracts, take a look at how they originated and how today’s traders across different markets use them. We’ll also compare the opportunities and risks of both stock futures trading and options contracts and examine the current state of the crypto-derivatives markets. 

What is a Futures Contract? 

When you hear the terms “futures” and “futures contract,” they mean one and the same thing. A futures contract is a simple legal agreement between two parties that a particular asset or commodity will be sold at a pre-agreed price on a specific date in the future. 
Futures are one of the oldest forms of derivatives, and their origins offer a simple way of explaining how futures work. Futures emerged as a means of farmers hedging against the future value of their crops. At the start of the growing season, the farmers couldn’t predict whether or not they would have a good or a bad harvest, as it would depend on factors such as the weather.
Similarly, imagine a baker buying the wheat from the farmer on the other side of the transaction – they were subject to the same uncertainty. So, the farmers and the bakers would agree on a price for the harvest at the start of the season.
According to the laws of supply and demand, a good harvest would increase supply, and push down the price of the wheat. Conversely, a poor harvest creates a shortage, driving demand, and wheat prices high. By entering into a futures contract, the farmers and the bakers could hedge their overall risk by agreeing on the harvest price upfront.
Although the markets have evolved, the nature of futures contracts remains the same. Today’s futures markets consist of hedgers and speculators. Hedgers are the parties with commodities or assets to sell who want to secure an agreed price. Speculators are those trade futures contracts against the value of the asset without ever planning to take custody of the asset itself. 
The financial markets are filled with jargon, so you may come across different terms and be left wondering “what are stock futures?” or “what are forex futures?” Rest assured that the explainer given here applies to any futures market, whether the underlying asset is stocks, fiat currencies, cryptocurrencies, or commodities like oil, metals, or utilities. 
So now that you’ve had a futures contract explained, how does an options contract work? 

What is an Options Contract?

A critical difference between futures and options is that an options contract doesn’t represent a legal agreement to buy or sell. An options contract creates a right, not an obligation, to enter into a trade before a fixed date at which the contract expires. 
Options contracts are of two types. A call option is a contract that allows the trader to buy a particular asset at a fixed price, called the strike price before the contract expires. Let’s say someone opens a call option to buy BTC at $10k with an expiry date at the end of 2020.
If BTC goes up to $15k, the trader can buy the BTC at $10k and immediately sell on the open market at $15k, realizing a $5k profit on the transaction. They could also sell the option contract itself, as it already represents a profit. 
The other type of option is a put option, which works in exactly the same way except it represents a sell transaction rather than a buy transaction. 
Like futures contracts, options contracts have a long and rich history, stretching all the way back to Ancient Greece. Aristotle provides a great example of options contracts in action at the time. He wrote of a poor philosopher called Thales, who made his wealth by forecasting the future year’s olive harvest. 
Thales made agreements with the olive press owners for the option to use their olive presses at a fixed value. The next year, there was a bountiful olive harvest. Due to the increased demand for olive presses, Thales was able to sell his “olive press options” for a profit.  

What is the Difference Between Futures and Options?

So, now we’ve covered the difference between futures and options on a mechanical level, what are the differences between future and options in a trading scenario?
Buying options offer a more conservative approach to trading. When buying options, the trader can never lose more than their initial investment, known as the premium. The premium value may vary depending on the difference between the option strike price and the actual asset price and the time left before the option expiry.
Regardless of whether the asset price falls way below the premium, the trader doesn’t lose any more than this value. This applies if they can’t sell the option and choose not to exercise their right to buy. 
The option seller faces far more risk, as they must honor the agreement to sell the options at the strike price. Selling (also called writing) options can lead to very high losses in volatile markets and are best left to the most experienced institutional options traders. 
Futures represent a legally binding agreement to buy an asset; therefore, they carry more risk as the trader cannot simply choose not to fulfill the trade. Furthermore, profits and losses are directly linked to the value of the asset with no premium to offset the downside. 
Conversely, though, trading futures offers the opportunity for far higher returns than trading options. Trading futures on margin amplifies the potential for even bigger profits, and losses, with futures trading. 
Options trading can be more complicated to understand than futures trading. However, once the basics are in place, options represent a solid choice for a newer trader. Because the risk exposure on a call option is limited to the premium paid, a trader can get away with understanding less about the market itself. 
On the other hand, experienced traders who know their markets well tend to opt for futures vs. options. If you’ve spent long enough understanding the markets for a particular asset, then you’re more likely to turn a bigger profit using leveraged futures contracts than with options. 

Markets for Futures and Options

You can trade futures and options across a wide variety of markets. These include:

  • Stocks such as Apple, Google or any publicly-traded company
  • Indices such as the S&P 500 or the DJI
  • Foreign currencies
  • Commodities such as precious metals, oil, and gas, or agricultural products
  • Cryptocurrencies such as Bitcoin or Ether

Trading in these markets can happen both over-the-counter and in exchanges. 
In the traditional financial markets, there is an even broader range of financial derivatives, including forwards and swaps covering a variety of assets. However, in the cryptocurrency space, it’s the futures contract that currently reigns supreme. 

The Burgeoning Crypto-Derivative Market

A vast market for cryptocurrency derivatives has emerged over the last year or two. BitMEX first opened its doors in 2014, but the CME and the Cboe started offering bitcoin futures contracts to institutional clients in December 2017. The primary attraction in trading cryptocurrency derivatives is that the markets are more volatile. This volatility provides the opportunity for traders to realize far more significant gains than in traditional markets, which are more stable. Futures trading also provided the first means of going short on bitcoin. 
At this point in 2019, there are more exchanges to choose from if you want to trade cryptocurrency futures. BitMEX still dominates, but there are plenty of other choices, including Deribit, Bybit, and Cryptofacilities. Many existing cryptocurrency exchanges have expanded into futures too, including OKEx, Huobi and soon, Binance. 
Once Digitex launches, we aim for our zero-commission, decentralized futures exchange to outrank each of them on factors including fees, leverage, security, and liquidity. With the crypto futures markets at an all-time high, there’s no better time than now for new entrants to emerge. 
At the time of writing, the only exchange offering cryptocurrency options is Deribit. This makes the market for options far more limited than futures.  
At Digitex, we firmly believe that futures are the superior choice, particularly for more experienced and regular cryptocurrency traders. They were the first crypto-derivative to emerge, they provide the opportunity for the highest returns, and they have strong institutional and retail support. While the prospects for cryptocurrency options trading remain limited, liquidity will continue to be a challenge. Of course, things could change if more exchanges start offering options. 

Knowledge is Power

So, what about newcomers to the markets, or those who don’t trade so regularly? Well, there are no barriers to entry. However, newcomers to all kinds of trading should take steps to ensure they are educating themselves about the futures trading basics, such as types of instruments on offer and the markets for the underlying assets. 
It will also help to gain an understanding of the principles of technical and fundamental analysis which traders use to read and forecast market fluctuations. Furthermore, all traders, whether newcomers or the most experienced, should have an understanding of their own appetite for risk, and know when to exit a losing trade. 
Following these principles will serve you well, whether you choose to trade spot or derivatives, crypto or stocks, want to make a living trading futures or just trade for fun on the side, or engage in day trading or long term investing. If you want to learn more, the Digitex blog is a great place to start. We’ve published many informational articles which explain futures trading in-depth, covering jargon, strategy, analysis, trading versus investing, and much more. In trading as in life, knowledge is power. 
 
 

Latest News