bitcoin derivatives

What Are Bitcoin Derivatives and What Benefits Do They Offer for Traders?

Digitex Futures
Cryptocurrency
Trading
• Digitex
April 5, 2021

Bitcoin derivatives trading has been on the rise.

According to a TokenInsight report, the crypto derivatives market featured a $2.7 trillion trading volume in Q3 2020, representing a 25.1% surge from the previous quarter as well as a year-over-year (YoY) growth of nearly 160%.

But what are Bitcoin derivatives, what benefits do they offer, and what is the best crypto trading platform to get started?

Bitcoin Derivatives Trading Explained

With rising popularity in both the crypto industry and traditional finance, derivatives are financial contracts between two or more parties that derive their values from one or a basket of underlying assets.

Bitcoin derivatives products follow the BTC price, allowing users to trade contracts without owning the digital asset.

Most cryptocurrency derivatives fall into the following two categories:

  • Options contracts: Crypto options refer to an agreement between two parties to buy or sell a digital asset at a fixed price before the expiration date. While buyers (holders) purchase options from sellers (writers) at a premium, the prior parties are not obliged to exercise their rights on the expiry date.
  • Futures contracts: Bitcoin futures contracts are very similar to options as they also feature an agreement between two parties to trade an underlying digital asset at a predetermined price at a future date. However, unlike options contracts, both the buyers and sellers of crypto futures are required to fulfill their commitments.

In addition to what the spot market offers, Bitcoin derivatives trading allows users to:

  1. Trade digital assets on a margin with leverage to increase the potential for profits
  2. Harness the benefits of a bear market by shorting digital assets
  3. Stabilize price fluctuations during times of extreme volatility
  4. Hedge against the risks of the crypto market

Where to Trade Bitcoin Derivatives?

Now that you know the basics let’s see where to trade Bitcoin derivatives.

The best way to gain exposure to digital asset derivatives is via a cryptocurrency exchange that offers the following features to traders:

  1. High liquidity
  2. Reasonable trading fees
  3. Robust and beginner-friendly platform
  4. Access to multiple cryptocurrency derivatives products
  5. Fast deposits and withdrawals

Is There a Way to Trade Crypto Derivatives for Free?

Most cryptocurrency exchanges impose fees on derivatives trading to maintain a profitable business.

While the standard trading fees range around 0.10% at the majority of the providers, the costs can easily add up if you are using leverage. For example, on a 100x leverage, the exchange will deduct 10% of your margin on every single trade.

Doing so hurts your profitability while rendering the crypto trading strategies of many scalpers and high-frequency traders null and void.

But what if we told you that there is a way that allows you to trade crypto derivatives for free?

Meet Digitex, the next-generation futures exchange that offers commission-free cryptocurrency trading for all its users.

What Are Bitcoin Derivatives and What Benefits Do They Offer for Traders? 1

Digitex achieves free crypto trading on its platform by leveraging its native DGTX token.

Denominating all account balances in DGTX and using the cryptocurrency to pay out profits and losses allows the exchange’s users to enjoy a zero-fee trading experience while keeping 100% of their revenue.

In addition to the ability to trade crypto for FREE, Digitex offers the following benefits to its users:

  1. Rewards programs to earn an extra income on your crypto
  2. Enhanced liquidity
  3. Seamless and user-friendly platform
  4. Lightning-fast matching engine with one-click trade submission
  5. Automated crypto trading to maximize revenue and accumulate more DGTX rewards via liquidity mining
  6. 24/7 availability
  7. Peer-to-peer (P2P) trading without intermediaries

Digitex: the Revolutionary Crypto Trading Platform for Bitcoin Derivatives

With zero fees, lightning-fast speed, generous rewards programs, as well as a robust crypto trading platform, Digitex is the right choice for every trader looking to gain easy exposure to digital asset derivatives.

Are you ready to trade Bitcoin derivatives while keeping 100% of your profits? Create an account at Digitex now.

Also, don’t forget to stock up your DGTX bags to benefit from Digitex’s rapid growth and profit from the favorable price movements of the crypto exchanges’ native token (DGTX closed March with an amazing 222% ROI).

 

April 5, 2021
Digitex Futures
Cryptocurrency
Trading

What Are Bitcoin Derivatives and What Benefits Do They Offer for Traders?

Digitex
bitcoin derivatives

Bitcoin derivatives trading has been on the rise.

According to a TokenInsight report, the crypto derivatives market featured a $2.7 trillion trading volume in Q3 2020, representing a 25.1% surge from the previous quarter as well as a year-over-year (YoY) growth of nearly 160%.

But what are Bitcoin derivatives, what benefits do they offer, and what is the best crypto trading platform to get started?

Bitcoin Derivatives Trading Explained

With rising popularity in both the crypto industry and traditional finance, derivatives are financial contracts between two or more parties that derive their values from one or a basket of underlying assets.

Bitcoin derivatives products follow the BTC price, allowing users to trade contracts without owning the digital asset.

Most cryptocurrency derivatives fall into the following two categories:

  • Options contracts: Crypto options refer to an agreement between two parties to buy or sell a digital asset at a fixed price before the expiration date. While buyers (holders) purchase options from sellers (writers) at a premium, the prior parties are not obliged to exercise their rights on the expiry date.
  • Futures contracts: Bitcoin futures contracts are very similar to options as they also feature an agreement between two parties to trade an underlying digital asset at a predetermined price at a future date. However, unlike options contracts, both the buyers and sellers of crypto futures are required to fulfill their commitments.

In addition to what the spot market offers, Bitcoin derivatives trading allows users to:

  1. Trade digital assets on a margin with leverage to increase the potential for profits
  2. Harness the benefits of a bear market by shorting digital assets
  3. Stabilize price fluctuations during times of extreme volatility
  4. Hedge against the risks of the crypto market

Where to Trade Bitcoin Derivatives?

Now that you know the basics let’s see where to trade Bitcoin derivatives.

The best way to gain exposure to digital asset derivatives is via a cryptocurrency exchange that offers the following features to traders:

  1. High liquidity
  2. Reasonable trading fees
  3. Robust and beginner-friendly platform
  4. Access to multiple cryptocurrency derivatives products
  5. Fast deposits and withdrawals

Is There a Way to Trade Crypto Derivatives for Free?

Most cryptocurrency exchanges impose fees on derivatives trading to maintain a profitable business.

While the standard trading fees range around 0.10% at the majority of the providers, the costs can easily add up if you are using leverage. For example, on a 100x leverage, the exchange will deduct 10% of your margin on every single trade.

Doing so hurts your profitability while rendering the crypto trading strategies of many scalpers and high-frequency traders null and void.

But what if we told you that there is a way that allows you to trade crypto derivatives for free?

Meet Digitex, the next-generation futures exchange that offers commission-free cryptocurrency trading for all its users.

What Are Bitcoin Derivatives and What Benefits Do They Offer for Traders? 2

Digitex achieves free crypto trading on its platform by leveraging its native DGTX token.

Denominating all account balances in DGTX and using the cryptocurrency to pay out profits and losses allows the exchange’s users to enjoy a zero-fee trading experience while keeping 100% of their revenue.

In addition to the ability to trade crypto for FREE, Digitex offers the following benefits to its users:

  1. Rewards programs to earn an extra income on your crypto
  2. Enhanced liquidity
  3. Seamless and user-friendly platform
  4. Lightning-fast matching engine with one-click trade submission
  5. Automated crypto trading to maximize revenue and accumulate more DGTX rewards via liquidity mining
  6. 24/7 availability
  7. Peer-to-peer (P2P) trading without intermediaries

Digitex: the Revolutionary Crypto Trading Platform for Bitcoin Derivatives

With zero fees, lightning-fast speed, generous rewards programs, as well as a robust crypto trading platform, Digitex is the right choice for every trader looking to gain easy exposure to digital asset derivatives.

Are you ready to trade Bitcoin derivatives while keeping 100% of your profits? Create an account at Digitex now.

Also, don’t forget to stock up your DGTX bags to benefit from Digitex’s rapid growth and profit from the favorable price movements of the crypto exchanges’ native token (DGTX closed March with an amazing 222% ROI).

 

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scalping profit

How to Profit from Scalping: A Winning Futures Trading Strategy

Digitex Futures
Trading
• Adam Todd
April 2, 2021

Digitex CEO Adam Todd has made his career on the back of a trading technique called scalping. It’s a highly successful futures trading strategy for short-term traders – under the right conditions. However, when the conditions are right, you can learn to win at scalping in any market. Here, Adam shares his tips and insights for how to implement your own winning scalping trading strategy. 

As a successful futures and sports betting trader, my trading style was always focused more on avoiding losing trades than on riding the winners. And the way I did that was to make my trades as short-term as possible. I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser. 

There seemed to be a direct link between my success, and how little time I held a position before going flat again. The shorter the amount of time in a position, the better chance I had of that trade not being a loser. This was most likely due to the nature of my trade selection process which was to be flat for most of the time, occasionally darting in and out of the market stealing single tick profits from larger moves when momentum picked up.

My scalping strategy basically involved judging when the momentum is high enough to keep the move going for another 30 seconds. If I didn’t get at least a single tick profit within that timeframe there was no reason to stay in that trade.

Successful Scalpers Don’t Get Tied Up in Learning About the Asset

As a young pit trader, I had no idea what a Bund futures contract actually was or why it moved around so much. Later, as a sports betting trader, I wouldn’t even know the name of the horse on which I was placing and laying hundreds of bets. Yet, I would go weeks and sometimes months of full-time trading as a scalper without having a single losing day. 

Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade. 

This style of ultra short term, manual trading is labor-intensive and requires the full concentration and attention of the trader. You can’t be checking emails and looking on Facebook and reading random crypto trading articles while you’re scalping to win. 

Besides, you don’t need to know what’s going on out there. It doesn’t matter why a price is moving when you’re a scalp trader because whichever way it goes you’re going to be following it. 

Scalping shouldn’t be a contrary style of trading because the active approach means you can get yourself in a huge mess very quickly. The safest style of scalping is simply following the price, jumping in when momentum is at its highest and then getting out quickly. 

It’s actually better to have no opinion or knowledge of the long term price direction of the underlying instrument so that it doesn’t affect your ability to go against that opinion in these short term scalp trades.

How Fees Ravage Profits

The scalping style of trading described here is the easiest to learn, requires no specialized knowledge about the underlying instrument and will give you steadier, less volatile results. But the big problem is that this style of trading is particularly susceptible to the ravages of the maker and taker fee model of crypto futures exchanges. 

It was possible for me to successfully scalp trade traditional futures markets in this manner because the futures tick value of one tick on the Bund was 25 Deutsch Marks and the commission to buy and sell one futures contract was less than 3 Deutsch Marks and I got a scratch trade rebate every time I bought and sold at the same price. 

All I had to do was make one tick for every 10 round turns to break even, and anything I made over that was profit. It was a lot harder than it sounds. But it was possible because the commission fee to buy and sell one futures contract was one-tenth of the value of one tick. 

However, the taker fee model used on every other crypto futures exchange has established commissions that are astronomically high. Currently, my style of short term scalping to win is literally impossible. The commission cost of buying and selling one futures contract with a taker order is more like ten times the value of one tick. 

That’s absolutely crazy. It’s literally impossible to beat odds like that running against you. At the exact moment you enter a trade, you’re ten ticks offside already. There’s a built-in mechanical edge that you cannot beat, and which guarantees you will lose over the long run. 

On Bitmex, the taker fee is 0.075% of the notional value of the underlying instrument. That may look small, but if you’re trading with 100x leverage that’s actually 7.5% of the margin you put down to enter the trade. If you exit the trade with a Taker order then your trading fees are 15% of the order value! 

For example, total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. How can you ever expect to beat a 15% edge working against you?

A typical trade for a short term scalper might go like this: the price starts moving fast so I enter a trade quickly with a taker order that either smash the bid or lifts the offer. Then I immediately place a maker order to join the bid or offer to get out. If it’s not filled within seconds then I’ll cancel that and lift the offer or hit the bid with another taker order to exit the trade. 

I entered the trade with a taker order so now I need to make ten ticks just to break even. And if I exit the trade with a taker order I’ve got to make 20 ticks profit just to break even. That’s just impossible for a short-term scalp trade. 

I can still place trades as maker orders only but it’s impossible to trade profitably when you’re limited to only maker orders. This is especially true in very volatile markets – like crypto – and you will constantly not be getting filled on the good moves. 

Simply put, the maker fee and taker fee model generate large commissions for the exchange and makes it impossible for profitable short-term scalping. A huge number of traders are unable to participate and the massive liquidity they would provide is suffocated by the exchange’s need to charge high fees on turnover. 

As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.

How Digitex Enables Profitable Scalp Trading

The Digitex Futures exchange is a short-term trader’s paradise. With absolutely no trading fees of any kind on taker orders, traders are free to pursue day trading futures strategies like scalping that are not viable anywhere else, creating massive liquidity in the process. 

That liquidity isn’t constantly drained by the exchange in the form of commissions. Instead, it continues to churn around in the trading ecosystem until it is won by the better traders. As a result, the chances of becoming a winning scalp trader on Digitex are far higher because we’re not siphoning off commission fees as percentages of the notional value of traded contracts. 

The viral marketing potential of a futures exchange that doesn’t have any built-in mechanical edge working against its traders is massive. The effective deployment of user-generated content combined with viral marketing techniques is starting to create a very large and active userbase, further increasing liquidity. 

Living a Traders Dream

Successful trading is a dream of many millions of people and Digitex wants to help make many of those dreams come true. We hope that many thousands of people will experience the unbridled freedom and excitement of becoming a profitable short-term trader who gets to live a lifestyle that most people will only dream of. 

Imagine if you can consistently make $50 a day or $200 a day or $500 a day from trading? How much would that change your life and the lives of everyone around you for the better? 

If you want to start implementing your own successful scalp trading strategy with zero fees, sign up for an account now and start living the trader’s dream.

April 2, 2021
Digitex Futures
Trading

How to Profit from Scalping: A Winning Futures Trading Strategy

Adam Todd
scalping profit

Digitex CEO Adam Todd has made his career on the back of a trading technique called scalping. It’s a highly successful futures trading strategy for short-term traders – under the right conditions. However, when the conditions are right, you can learn to win at scalping in any market. Here, Adam shares his tips and insights for how to implement your own winning scalping trading strategy. 

As a successful futures and sports betting trader, my trading style was always focused more on avoiding losing trades than on riding the winners. And the way I did that was to make my trades as short-term as possible. I discovered that the longer I held a position, the bigger the risk that my position would turn into a loser. 

There seemed to be a direct link between my success, and how little time I held a position before going flat again. The shorter the amount of time in a position, the better chance I had of that trade not being a loser. This was most likely due to the nature of my trade selection process which was to be flat for most of the time, occasionally darting in and out of the market stealing single tick profits from larger moves when momentum picked up.

My scalping strategy basically involved judging when the momentum is high enough to keep the move going for another 30 seconds. If I didn’t get at least a single tick profit within that timeframe there was no reason to stay in that trade.

Successful Scalpers Don’t Get Tied Up in Learning About the Asset

As a young pit trader, I had no idea what a Bund futures contract actually was or why it moved around so much. Later, as a sports betting trader, I wouldn’t even know the name of the horse on which I was placing and laying hundreds of bets. Yet, I would go weeks and sometimes months of full-time trading as a scalper without having a single losing day. 

Short-term scalping requires no fundamental knowledge of the underlying instrument on which you’re trading. As soon as you have entered a position you’re looking to exit it, hopefully with a one or two tick profit but willing to scratch it or lose a tick without any emotional attachment to the trade. 

This style of ultra short term, manual trading is labor-intensive and requires the full concentration and attention of the trader. You can’t be checking emails and looking on Facebook and reading random crypto trading articles while you’re scalping to win. 

Besides, you don’t need to know what’s going on out there. It doesn’t matter why a price is moving when you’re a scalp trader because whichever way it goes you’re going to be following it. 

Scalping shouldn’t be a contrary style of trading because the active approach means you can get yourself in a huge mess very quickly. The safest style of scalping is simply following the price, jumping in when momentum is at its highest and then getting out quickly. 

It’s actually better to have no opinion or knowledge of the long term price direction of the underlying instrument so that it doesn’t affect your ability to go against that opinion in these short term scalp trades.

How Fees Ravage Profits

The scalping style of trading described here is the easiest to learn, requires no specialized knowledge about the underlying instrument and will give you steadier, less volatile results. But the big problem is that this style of trading is particularly susceptible to the ravages of the maker and taker fee model of crypto futures exchanges. 

It was possible for me to successfully scalp trade traditional futures markets in this manner because the futures tick value of one tick on the Bund was 25 Deutsch Marks and the commission to buy and sell one futures contract was less than 3 Deutsch Marks and I got a scratch trade rebate every time I bought and sold at the same price. 

All I had to do was make one tick for every 10 round turns to break even, and anything I made over that was profit. It was a lot harder than it sounds. But it was possible because the commission fee to buy and sell one futures contract was one-tenth of the value of one tick. 

However, the taker fee model used on every other crypto futures exchange has established commissions that are astronomically high. Currently, my style of short term scalping to win is literally impossible. The commission cost of buying and selling one futures contract with a taker order is more like ten times the value of one tick. 

That’s absolutely crazy. It’s literally impossible to beat odds like that running against you. At the exact moment you enter a trade, you’re ten ticks offside already. There’s a built-in mechanical edge that you cannot beat, and which guarantees you will lose over the long run. 

On Bitmex, the taker fee is 0.075% of the notional value of the underlying instrument. That may look small, but if you’re trading with 100x leverage that’s actually 7.5% of the margin you put down to enter the trade. If you exit the trade with a Taker order then your trading fees are 15% of the order value! 

For example, total fees on a $1,000 trade with 100x leverage are $150 [100 x $1,000 x 0.00075 x 2]. How can you ever expect to beat a 15% edge working against you?

A typical trade for a short term scalper might go like this: the price starts moving fast so I enter a trade quickly with a taker order that either smash the bid or lifts the offer. Then I immediately place a maker order to join the bid or offer to get out. If it’s not filled within seconds then I’ll cancel that and lift the offer or hit the bid with another taker order to exit the trade. 

I entered the trade with a taker order so now I need to make ten ticks just to break even. And if I exit the trade with a taker order I’ve got to make 20 ticks profit just to break even. That’s just impossible for a short-term scalp trade. 

I can still place trades as maker orders only but it’s impossible to trade profitably when you’re limited to only maker orders. This is especially true in very volatile markets – like crypto – and you will constantly not be getting filled on the good moves. 

Simply put, the maker fee and taker fee model generate large commissions for the exchange and makes it impossible for profitable short-term scalping. A huge number of traders are unable to participate and the massive liquidity they would provide is suffocated by the exchange’s need to charge high fees on turnover. 

As a scalper, I shouldn’t be paying a percentage of the notional value of the underlying instrument. I’m providing liquidity and should be encouraged, not squeezed out of the market entirely.

How Digitex Enables Profitable Scalp Trading

The Digitex Futures exchange is a short-term trader’s paradise. With absolutely no trading fees of any kind on taker orders, traders are free to pursue day trading futures strategies like scalping that are not viable anywhere else, creating massive liquidity in the process. 

That liquidity isn’t constantly drained by the exchange in the form of commissions. Instead, it continues to churn around in the trading ecosystem until it is won by the better traders. As a result, the chances of becoming a winning scalp trader on Digitex are far higher because we’re not siphoning off commission fees as percentages of the notional value of traded contracts. 

The viral marketing potential of a futures exchange that doesn’t have any built-in mechanical edge working against its traders is massive. The effective deployment of user-generated content combined with viral marketing techniques is starting to create a very large and active userbase, further increasing liquidity. 

Living a Traders Dream

Successful trading is a dream of many millions of people and Digitex wants to help make many of those dreams come true. We hope that many thousands of people will experience the unbridled freedom and excitement of becoming a profitable short-term trader who gets to live a lifestyle that most people will only dream of. 

Imagine if you can consistently make $50 a day or $200 a day or $500 a day from trading? How much would that change your life and the lives of everyone around you for the better? 

If you want to start implementing your own successful scalp trading strategy with zero fees, sign up for an account now and start living the trader’s dream.

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