futures

ETHUSD Futures Market Tick Size Will Change to $1

Digitex
Trading
• Digitex
May 11, 2021

Heads up, traders! Digitex will be changing the tick size on our ETHUSD futures market from $0.25 to $1. On May 12 at 12:00 UTC, the Digitex exchange will be down for one hour as we make the necessary adjustment. So, please keep in mind that you will not be able to access your account during that time. All orders on the ETHUSD will be settled, so you should close them ahead.

The Rising Price of ETH

As you all know, the price of ETH has been on an absolute tear this year, running circles around Bitcoin and hitting a new all-time high of more than $4,200! Even today, as it’s cooled off slightly, the number one altcoin is still registering a yearly gain of almost 2000%. Of course, this is great for traders, investors, and Ethereum enthusiasts. But, when it comes to trading on a ladder, a tick size of $0.25 on an asset with such a high price makes for a poor user experience as contracts keep jumping off the ladder.

The change in tick size on the ETHUSD market will prevent this from happening and also make it easier for liquidity miners. So, we can expect to see more bids and offers closer to the spot price after we make the switch, making the trading experience on the Digitex exchange better for everyone. 

Keep in mind that, on the Digitex platform, the $1 tick is equivalent to 1 DGTX. So, when you win or lose 1 tick ($1), you win or lose 1 DGTX. The contract value of ETHUSD remains the same as it was.

Take Advantage of ETH Volatility Trading Commission-Free

As always, with ETH’s skyrocketing price and swift corrections, there’s no better time to capitalize on the premier altcoin’s extreme volatility. So, be sure to get trading on the platform now! Digitex is the ONLY exchange that lets you pursue high-frequency trading strategies that allow you to place unlimited trades without paying any transaction fees of any kind. Simply trade and walk away with 100% of your profit.

Just please keep in mind that the exchange will be down for around one hour on May 12 at 12:00 UTC while we make the switch. We hope you enjoy the improved trading experience. Any questions at all, please contact our customer support or hit us up on our socials. 

May 11, 2021
Digitex
Trading

ETHUSD Futures Market Tick Size Will Change to $1

Digitex
futures

Heads up, traders! Digitex will be changing the tick size on our ETHUSD futures market from $0.25 to $1. On May 12 at 12:00 UTC, the Digitex exchange will be down for one hour as we make the necessary adjustment. So, please keep in mind that you will not be able to access your account during that time. All orders on the ETHUSD will be settled, so you should close them ahead.

The Rising Price of ETH

As you all know, the price of ETH has been on an absolute tear this year, running circles around Bitcoin and hitting a new all-time high of more than $4,200! Even today, as it’s cooled off slightly, the number one altcoin is still registering a yearly gain of almost 2000%. Of course, this is great for traders, investors, and Ethereum enthusiasts. But, when it comes to trading on a ladder, a tick size of $0.25 on an asset with such a high price makes for a poor user experience as contracts keep jumping off the ladder.

The change in tick size on the ETHUSD market will prevent this from happening and also make it easier for liquidity miners. So, we can expect to see more bids and offers closer to the spot price after we make the switch, making the trading experience on the Digitex exchange better for everyone. 

Keep in mind that, on the Digitex platform, the $1 tick is equivalent to 1 DGTX. So, when you win or lose 1 tick ($1), you win or lose 1 DGTX. The contract value of ETHUSD remains the same as it was.

Take Advantage of ETH Volatility Trading Commission-Free

As always, with ETH’s skyrocketing price and swift corrections, there’s no better time to capitalize on the premier altcoin’s extreme volatility. So, be sure to get trading on the platform now! Digitex is the ONLY exchange that lets you pursue high-frequency trading strategies that allow you to place unlimited trades without paying any transaction fees of any kind. Simply trade and walk away with 100% of your profit.

Just please keep in mind that the exchange will be down for around one hour on May 12 at 12:00 UTC while we make the switch. We hope you enjoy the improved trading experience. Any questions at all, please contact our customer support or hit us up on our socials. 

Latest News

Digitex

6 Ways Digitex Is Bringing You an Optimized Trading Experience

Digitex Futures
• Digitex
March 29, 2021

If you’re already active on the Digitex exchange, you’ll understand the benefits of trading bitcoin (BTC) futures with zero fees using a rapid-fire trading ladder. When time is of the essence in volatile markets, being able to enter and exit a trade with a single click can mean the difference between winning and losing. And if you haven’t checked out our platform yet, here are six of the ways Digitex is bringing you an optimized trading experience.

1. Zero Fees

Digitex lets you trade bitcoin (BTC) and ether (ETH) futures with zero commissions on any trade. While an average taker fee of 0.075% may not sound like much, if you’re using 100 x leverage, that translates into a massive 7.5% of your margin–on every single trade! This is especially punishing to high-frequency traders looking to scalp single-tick profits on the smallest of price fluctuations. In fact, in most cases, it’s enough to render their strategies null and void.

At Digitex, we don’t believe in punishing our most active traders who lend the most liquidity to the exchange. Instead, we provide a zero-fee trading environment made possible by trading using our native exchange token DGTX. All account balances are denominated in DGTX and profits and losses are paid out in DGTX. This saves you from paying commissions and lets you keep 100% of your profits. Find out more about DGTX tokenomics and how we enable sustainable zero-fee trading here.

2. Highly Liquid

Focusing all the liquidity from our growing user base on our popular BTCUSD and ETHUSD markets, traders can enjoy tight bid/ask spreads and rapidly filled orders. This is further facilitated by Digitex’s Liquidity Mining program which pays out 6 million DGTX rewards monthly.

Every minute at a random time, our system takes a snapshot of the order book and pays out 140 DGTX rewards to traders based on how close their unmatched orders are to the spot price at the time. In other words, they get paid (generously!) to trade on the exchange simply by lending liquidity.

3. 24/7 Trading

Unlike trading traditional futures, the cryptocurrency markets never sleep. This means that you can trade whenever you have the time either as a hobby or as a full-time day trader. And when you need a break from the screen, Digitex has handy mechanisms in place like our improved stop-loss order that helps you automatically minimize your losses in the event of unexpected volatility.

4. P2P Trading

Trading on the Digitex Futures exchange is P2P. This creates a level playing field and a fairer marketplace as opposed to betting against the house because, unlike other exchanges, we don’t have a vested interest in you losing. 

5. API for Bot Trading

In order to maximize your gains from trading and accumulate more DGTX rewards through liquidity mining, we provide a simple API to set up bot trading. Designed to be intuitive for anyone to use (not just programmers or seasoned crypto traders), it couldn’t be easier to amplify the gains you make while trading on our platform.

6. Additional Ways to Earn Rewards

Digitex users can put their DGTX tokens to further uses apart from trading. Through our rewards program via Uniswap, they can pool their DGTX tokens and earn a high APY with 5 million DGTX paid out monthly. For our community members that are more risk-averse and prefer to HODL rather than trade, this is an excellent way to generate a sustainable passive income on their DGTX holdings.

More to Come in Quarter 2, 2021

These are just six of the ways in which Digitex differs from other exchanges in the crypto space to offer an optimized trading experience. But we’re constantly working to improve. Coming up in quarter 2, 2021, we’ll be adding commission-free spot markets to our exchange as well. 

This will make it a lot easier to buy and sell DGTX within the platform for trading and earning rewards and will help make the exchange even more liquid with a larger user base. We’ll also be kicking off our own DGTX staking program in Q2 which will give holders and traders alike an extra source of income with a highly attractive APY.

If you haven’t signed up to trade on the Digitex exchange, you can do so easily by clicking this link here. We’re sure that you’ll love crypto’s only trading ladder and zero fees, powered by our native DGTX token. And, if you have any questions at all, be sure to hit us up on any of our socials, take advantage of our Live Chat feature, or open a Support ticket today.

March 29, 2021
Digitex Futures

6 Ways Digitex Is Bringing You an Optimized Trading Experience

Digitex
Digitex

If you’re already active on the Digitex exchange, you’ll understand the benefits of trading bitcoin (BTC) futures with zero fees using a rapid-fire trading ladder. When time is of the essence in volatile markets, being able to enter and exit a trade with a single click can mean the difference between winning and losing. And if you haven’t checked out our platform yet, here are six of the ways Digitex is bringing you an optimized trading experience.

1. Zero Fees

Digitex lets you trade bitcoin (BTC) and ether (ETH) futures with zero commissions on any trade. While an average taker fee of 0.075% may not sound like much, if you’re using 100 x leverage, that translates into a massive 7.5% of your margin–on every single trade! This is especially punishing to high-frequency traders looking to scalp single-tick profits on the smallest of price fluctuations. In fact, in most cases, it’s enough to render their strategies null and void.

At Digitex, we don’t believe in punishing our most active traders who lend the most liquidity to the exchange. Instead, we provide a zero-fee trading environment made possible by trading using our native exchange token DGTX. All account balances are denominated in DGTX and profits and losses are paid out in DGTX. This saves you from paying commissions and lets you keep 100% of your profits. Find out more about DGTX tokenomics and how we enable sustainable zero-fee trading here.

2. Highly Liquid

Focusing all the liquidity from our growing user base on our popular BTCUSD and ETHUSD markets, traders can enjoy tight bid/ask spreads and rapidly filled orders. This is further facilitated by Digitex’s Liquidity Mining program which pays out 6 million DGTX rewards monthly.

Every minute at a random time, our system takes a snapshot of the order book and pays out 140 DGTX rewards to traders based on how close their unmatched orders are to the spot price at the time. In other words, they get paid (generously!) to trade on the exchange simply by lending liquidity.

3. 24/7 Trading

Unlike trading traditional futures, the cryptocurrency markets never sleep. This means that you can trade whenever you have the time either as a hobby or as a full-time day trader. And when you need a break from the screen, Digitex has handy mechanisms in place like our improved stop-loss order that helps you automatically minimize your losses in the event of unexpected volatility.

4. P2P Trading

Trading on the Digitex Futures exchange is P2P. This creates a level playing field and a fairer marketplace as opposed to betting against the house because, unlike other exchanges, we don’t have a vested interest in you losing. 

5. API for Bot Trading

In order to maximize your gains from trading and accumulate more DGTX rewards through liquidity mining, we provide a simple API to set up bot trading. Designed to be intuitive for anyone to use (not just programmers or seasoned crypto traders), it couldn’t be easier to amplify the gains you make while trading on our platform.

6. Additional Ways to Earn Rewards

Digitex users can put their DGTX tokens to further uses apart from trading. Through our rewards program via Uniswap, they can pool their DGTX tokens and earn a high APY with 5 million DGTX paid out monthly. For our community members that are more risk-averse and prefer to HODL rather than trade, this is an excellent way to generate a sustainable passive income on their DGTX holdings.

More to Come in Quarter 2, 2021

These are just six of the ways in which Digitex differs from other exchanges in the crypto space to offer an optimized trading experience. But we’re constantly working to improve. Coming up in quarter 2, 2021, we’ll be adding commission-free spot markets to our exchange as well. 

This will make it a lot easier to buy and sell DGTX within the platform for trading and earning rewards and will help make the exchange even more liquid with a larger user base. We’ll also be kicking off our own DGTX staking program in Q2 which will give holders and traders alike an extra source of income with a highly attractive APY.

If you haven’t signed up to trade on the Digitex exchange, you can do so easily by clicking this link here. We’re sure that you’ll love crypto’s only trading ladder and zero fees, powered by our native DGTX token. And, if you have any questions at all, be sure to hit us up on any of our socials, take advantage of our Live Chat feature, or open a Support ticket today.

Latest News

Digitex

Check Out the Improved Stop Loss Order + Other Updates at Digitex

Trading
• Digitex
March 25, 2021

Hey, Digitex community! It’s been a busy week so far and we’re continuing to listen to your feedback and make additional improvements to the exchange. Today, we’re pleased to let you know that we have upgraded our stop loss order. As some of you have been requesting this for a while now, we think you’re going to love it. Read on to find out what’s changed and for other updates at Digitex this week as well. 

As any seasoned trader knows, stop loss orders are essential for trading to minimize your losses and effectively manage your risk. With that in mind, we’ve made the Digitex stop loss order much more effective and easy to use in three simple steps:

  1. Press the Buy or Sell select button
  2. Type in the trigger price that will trigger the stop (always keep in mind that this number is based on the spot price, not the futures price)
  3. Type in the quantity
  4. Press the button “Set buy stop” or “Set sell stop”

Check Out the Improved Stop Loss Order + Other Updates at Digitex 1

What Is a Stop Loss Order and What Is it For?

For those of you who are new to trading, fear not, there are no stupid questions. A stop loss order is an order that you place to buy or sell automatically once the asset in question reaches a certain price. Effectively, this means that you can take a break from trading with the peace of mind that, in the event of high volatility or the market going against you, you are protected from suffering major losses. 

So, say, for example, that you decide you don’t want to hold your long position if Bitcoin (BTC) falls by more than $100. You simply set your stop loss order at $100 below the price you bought at. If BTC falls to this price, you will automatically sell, and curtail your losses rather than potentially suffering far greater losses.

Since it costs nothing to set up your stop loss, it allows you to trade more efficiently knowing that you’ll never be further out of pocket than your risk appetite can tolerate. It also means that you can keep your emotions out of trading. Especially when you’re new to the market, it’s easy to ride the hype and let emotions cloud your judgement. This almost always leads to delays triggering a sale, higher losses, or even liquidation.

We hope you like the improvements to the stop loss order on Digitex. If you have more requests for UX/UI upgrades and additions, please share them on any of our socials or contact our support, and we’ll review them with the internal team.

What Else Is New at Digitex?

If you’ve been trading on our platform, you’ve probably already noticed that the spreads have gotten a lot tighter, even during really volatile markets as the price of BTC and ETH have plummeted this week. This (the tight spreads, not the price tanks!) is thanks to our new Liquidity Mining program. We’re really pleased to see that its purpose is taking full effect because it means that your orders are more likely to get filled. Traded volumes on the exchange are much higher this week due to this — $128 million 24-hour traded volume on the BTC futures market, and $31 million on ETH futures market.

Another really great piece of news is that the number of active traders on the exchange has doubled this week alone–and continues to rise daily. Since this is only week one of releasing the first of many upgrades to come on Digitex, we’re taking this as a good sign of what’s to come and happy to be back on track.

Last but not least, we understand that a lot of you have questions about the internal team and workings of Digitex. We made some very important organizational and workflow changes at the start of this year that have allowed us to kick things off again at a much faster, smoother, and more efficient pace–and with a far higher standard of quality. 

This is our primary goal for the rest of the year ahead. As we approach the second quarter of 2021 already, we plan to bring you many more pleasant surprises and upgrades, so be sure to stay tuned.

March 25, 2021
Trading

Check Out the Improved Stop Loss Order + Other Updates at Digitex

Digitex
Digitex

Hey, Digitex community! It’s been a busy week so far and we’re continuing to listen to your feedback and make additional improvements to the exchange. Today, we’re pleased to let you know that we have upgraded our stop loss order. As some of you have been requesting this for a while now, we think you’re going to love it. Read on to find out what’s changed and for other updates at Digitex this week as well. 

As any seasoned trader knows, stop loss orders are essential for trading to minimize your losses and effectively manage your risk. With that in mind, we’ve made the Digitex stop loss order much more effective and easy to use in three simple steps:

  1. Press the Buy or Sell select button
  2. Type in the trigger price that will trigger the stop (always keep in mind that this number is based on the spot price, not the futures price)
  3. Type in the quantity
  4. Press the button “Set buy stop” or “Set sell stop”

Check Out the Improved Stop Loss Order + Other Updates at Digitex 2

What Is a Stop Loss Order and What Is it For?

For those of you who are new to trading, fear not, there are no stupid questions. A stop loss order is an order that you place to buy or sell automatically once the asset in question reaches a certain price. Effectively, this means that you can take a break from trading with the peace of mind that, in the event of high volatility or the market going against you, you are protected from suffering major losses. 

So, say, for example, that you decide you don’t want to hold your long position if Bitcoin (BTC) falls by more than $100. You simply set your stop loss order at $100 below the price you bought at. If BTC falls to this price, you will automatically sell, and curtail your losses rather than potentially suffering far greater losses.

Since it costs nothing to set up your stop loss, it allows you to trade more efficiently knowing that you’ll never be further out of pocket than your risk appetite can tolerate. It also means that you can keep your emotions out of trading. Especially when you’re new to the market, it’s easy to ride the hype and let emotions cloud your judgement. This almost always leads to delays triggering a sale, higher losses, or even liquidation.

We hope you like the improvements to the stop loss order on Digitex. If you have more requests for UX/UI upgrades and additions, please share them on any of our socials or contact our support, and we’ll review them with the internal team.

What Else Is New at Digitex?

If you’ve been trading on our platform, you’ve probably already noticed that the spreads have gotten a lot tighter, even during really volatile markets as the price of BTC and ETH have plummeted this week. This (the tight spreads, not the price tanks!) is thanks to our new Liquidity Mining program. We’re really pleased to see that its purpose is taking full effect because it means that your orders are more likely to get filled. Traded volumes on the exchange are much higher this week due to this — $128 million 24-hour traded volume on the BTC futures market, and $31 million on ETH futures market.

Another really great piece of news is that the number of active traders on the exchange has doubled this week alone–and continues to rise daily. Since this is only week one of releasing the first of many upgrades to come on Digitex, we’re taking this as a good sign of what’s to come and happy to be back on track.

Last but not least, we understand that a lot of you have questions about the internal team and workings of Digitex. We made some very important organizational and workflow changes at the start of this year that have allowed us to kick things off again at a much faster, smoother, and more efficient pace–and with a far higher standard of quality. 

This is our primary goal for the rest of the year ahead. As we approach the second quarter of 2021 already, we plan to bring you many more pleasant surprises and upgrades, so be sure to stay tuned.

Latest News

Liquidity Mining

Maximize Your Liquidity Mining Rewards with Bot Trading

Digitex Futures
• Digitex
March 24, 2021

Since launching our Liquidity Mining program on Digitex on Monday, we’ve been listening to your feedback and taking your comments on board. We’re really pleased with the initial response so far! One overriding point that many of you made, however, is that it is difficult to profit from the program when trading manually. We, therefore, wanted to remind you that our API is available to set up bot trading to maximize your Liquidity Mining rewards–here’s how.

How To Get Started

To get started with bot trading (which will not only maximize your Liquidity Mining rewards but also take your trading game up a gear), you’ll need to first download Python and then Protobuf. You can find more details on how to do this for Mac OS, Ubuntu, or Windows here. Once you’re good to go, you’ll need to download Digitex engine client, a library that implements a client interface to the Digitex Futures trading engine, before connecting the main API.

We have laid out the instructions step by step in an informative article on our Support Center. This helpful guide should make it easy for you to download the necessary software, troubleshoot any issues, and get started with your bot on Digitex. However, if you have any questions at all or require any assistance to install your trading bot, don’t hesitate to reach out, our support team will be happy to help. Simply hit us up on any of our socials, use the Live Chat feature, or open a support ticket.

Another Upgrade Coming Soon

Finally, we understand from your feedback, that you’re hotly anticipating the release of our zero-fee spot exchange. Please be aware that this major upgrade is coming soon. As we stated in our article at the start of the year, the Digitex roadmap still stands intact. We’ve just learned from our past mistakes that it’s better to drop the upgrades and improvements when they’re ready to ship rather than force ourselves to commit to dates that we may not be able to reach. We appreciate all your understanding, support, and patience. 

And, in the meantime, be sure to get trading on the BTC futures market now ahead of Friday’s massive $6.1 billion BTC options expiry date… the volatility surrounding the king of all cryptos looks set to be epic! 

 

March 24, 2021
Digitex Futures

Maximize Your Liquidity Mining Rewards with Bot Trading

Digitex
Liquidity Mining

Since launching our Liquidity Mining program on Digitex on Monday, we’ve been listening to your feedback and taking your comments on board. We’re really pleased with the initial response so far! One overriding point that many of you made, however, is that it is difficult to profit from the program when trading manually. We, therefore, wanted to remind you that our API is available to set up bot trading to maximize your Liquidity Mining rewards–here’s how.

How To Get Started

To get started with bot trading (which will not only maximize your Liquidity Mining rewards but also take your trading game up a gear), you’ll need to first download Python and then Protobuf. You can find more details on how to do this for Mac OS, Ubuntu, or Windows here. Once you’re good to go, you’ll need to download Digitex engine client, a library that implements a client interface to the Digitex Futures trading engine, before connecting the main API.

We have laid out the instructions step by step in an informative article on our Support Center. This helpful guide should make it easy for you to download the necessary software, troubleshoot any issues, and get started with your bot on Digitex. However, if you have any questions at all or require any assistance to install your trading bot, don’t hesitate to reach out, our support team will be happy to help. Simply hit us up on any of our socials, use the Live Chat feature, or open a support ticket.

Another Upgrade Coming Soon

Finally, we understand from your feedback, that you’re hotly anticipating the release of our zero-fee spot exchange. Please be aware that this major upgrade is coming soon. As we stated in our article at the start of the year, the Digitex roadmap still stands intact. We’ve just learned from our past mistakes that it’s better to drop the upgrades and improvements when they’re ready to ship rather than force ourselves to commit to dates that we may not be able to reach. We appreciate all your understanding, support, and patience. 

And, in the meantime, be sure to get trading on the BTC futures market now ahead of Friday’s massive $6.1 billion BTC options expiry date… the volatility surrounding the king of all cryptos looks set to be epic! 

 

Latest News

Wondering How To Buy Futures? Check Out This Quick Guide 3

Wondering How To Buy Futures? Check Out This Quick Guide

Digitex Futures
Trading
• Christina Comben
September 2, 2019

As we announced the launch of our public testnet and inch closer to opening the gates, things are starting to get real at last! You may find yourself wondering how to buy futures or indeed, what futures really are. In this article, we explain the basic concepts, how to buy futures, the types of contracts, and all you need to know to get into stock futures investing.

About Futures 

For a more in-depth overview of futures and futures trading, check out our how-to guide here. However, the basic premise is this: Think of futures contracts as agreements between two parties to trade an asset (in this case Bitcoin) for an agreed-upon price in the future. 
Trading futures has many benefits and started out as a way of allowing large companies, farmers, oil producers, etc. to hedge their commodities’ value against price fluctuations. Say an oil producer believes that the price per barrel will drop significantly in the next six months. He can enter a futures contract to sell at today’s price in six months to secure his profit. Of course, he loses out if the price rises. Trading futures is always a gamble, even more so in the cryptocurrency space.
There are many different types of futures contracts, including physically settled and cash-settled, as well as daily and monthly settled and perpetual swaps. Until Bakkt makes its entrance in September of this year with the first physically settled Bitcoin Futures market, all futures in the crypto space are cash-settled. This means that the traders pay each other the difference instead of physically delivering the underlying asset (Bitcoin). 
While some traders are looking to hedge on price, most modern futures traders are speculators looking to trade on price fluctuations and make cash profits, rather than taking custody of the underlying asset (i.e. barrels of oil, bars of gold, or even bitcoins). This would be a physically-settled contract and is more applicable to institutional space, agricultural or airline industries, for example. 

Perpetual Swaps

What are perpetual swap contracts? Perpetual swaps have no expiration date, unlike daily or monthly settled futures contracts. This makes them easier to understand for retail traders and they will be the main focus of the Digitex Futures exchange. As Adam stated in the AMA about the testnet:
“With a futures contract that may not expire for another month, there’s a premium because the spot price is further away from the contract price. Also, at settlement, there’s a need to settle the old contract and then open a new contract. Perpetual swap futures are the way forward for attracting retail traders and therefore, ensuring volume.”

Futures Markets

The futures market globally is now enormous and growing all the time according to the Futures Industry Association, with futures traded against stocks, Forex, cryptocurrencies, indices, bonds, gold, and more.
If you were asking questions like, what are stock futures, what is day trading futures, and how to buy futures, it helps to have an overview of the different types of markets first–as well as the tools that good futures traders use to magnify their profits.
You can buy futures contracts through a traditional broker or online from an abundance of sites that make trading simpler and easier, cut out intermediaries and lower costs. On the Digitex Futures exchange, you’ll be able to buy cryptocurrency futures with zero commissions on all trades–a first for both the crypto and the futures industry.
Futures traders often use tools like margin and leverage to increase their profit sizes. Borrowing funds from an exchange to take a bigger position can be risky and highly leveraged traders can get blown out in volatile markets. However, leverage does give skilled traders the chance to make a lot of money fast and greatly magnify their winnings. This is why 100x leverage has become so popular in the cryptocurrency markets.

How to Buy Futures on the Digitex Exchange

On the Digitex exchange, you can buy futures using DGTX only. This means that you’ll need to know where to buy ether, first of all, to purchase DGTX and then all your profits and losses will be denominated in DGTX.
As Adam highlighted in his AMA, you will be buying a perpetual swap contract, which will be a dollar’s worth of DGTX tokens and has no expiration date. We are still finalizing the futures contract specifications, however, they will be essentially the same as other major futures exchanges such as BitMEX and Bybit to make it easier for their traders to switch over to Digitex. We want to make it as simple as possible to create winning traders and to allow them to trade successfully. 
Skilled traders are used to trading futures for profit. It takes time and discipline, but even you’re just starting out, earning some extra income from day trading futures is certainly within your reach, especially on a platform that charges no commissions and has no mechanical edge working against you.

September 2, 2019
Digitex Futures
Trading

Wondering How To Buy Futures? Check Out This Quick Guide

Christina Comben
Wondering How To Buy Futures? Check Out This Quick Guide 4

As we announced the launch of our public testnet and inch closer to opening the gates, things are starting to get real at last! You may find yourself wondering how to buy futures or indeed, what futures really are. In this article, we explain the basic concepts, how to buy futures, the types of contracts, and all you need to know to get into stock futures investing.

About Futures 

For a more in-depth overview of futures and futures trading, check out our how-to guide here. However, the basic premise is this: Think of futures contracts as agreements between two parties to trade an asset (in this case Bitcoin) for an agreed-upon price in the future. 
Trading futures has many benefits and started out as a way of allowing large companies, farmers, oil producers, etc. to hedge their commodities’ value against price fluctuations. Say an oil producer believes that the price per barrel will drop significantly in the next six months. He can enter a futures contract to sell at today’s price in six months to secure his profit. Of course, he loses out if the price rises. Trading futures is always a gamble, even more so in the cryptocurrency space.
There are many different types of futures contracts, including physically settled and cash-settled, as well as daily and monthly settled and perpetual swaps. Until Bakkt makes its entrance in September of this year with the first physically settled Bitcoin Futures market, all futures in the crypto space are cash-settled. This means that the traders pay each other the difference instead of physically delivering the underlying asset (Bitcoin). 
While some traders are looking to hedge on price, most modern futures traders are speculators looking to trade on price fluctuations and make cash profits, rather than taking custody of the underlying asset (i.e. barrels of oil, bars of gold, or even bitcoins). This would be a physically-settled contract and is more applicable to institutional space, agricultural or airline industries, for example. 

Perpetual Swaps

What are perpetual swap contracts? Perpetual swaps have no expiration date, unlike daily or monthly settled futures contracts. This makes them easier to understand for retail traders and they will be the main focus of the Digitex Futures exchange. As Adam stated in the AMA about the testnet:
“With a futures contract that may not expire for another month, there’s a premium because the spot price is further away from the contract price. Also, at settlement, there’s a need to settle the old contract and then open a new contract. Perpetual swap futures are the way forward for attracting retail traders and therefore, ensuring volume.”

Futures Markets

The futures market globally is now enormous and growing all the time according to the Futures Industry Association, with futures traded against stocks, Forex, cryptocurrencies, indices, bonds, gold, and more.
If you were asking questions like, what are stock futures, what is day trading futures, and how to buy futures, it helps to have an overview of the different types of markets first–as well as the tools that good futures traders use to magnify their profits.
You can buy futures contracts through a traditional broker or online from an abundance of sites that make trading simpler and easier, cut out intermediaries and lower costs. On the Digitex Futures exchange, you’ll be able to buy cryptocurrency futures with zero commissions on all trades–a first for both the crypto and the futures industry.
Futures traders often use tools like margin and leverage to increase their profit sizes. Borrowing funds from an exchange to take a bigger position can be risky and highly leveraged traders can get blown out in volatile markets. However, leverage does give skilled traders the chance to make a lot of money fast and greatly magnify their winnings. This is why 100x leverage has become so popular in the cryptocurrency markets.

How to Buy Futures on the Digitex Exchange

On the Digitex exchange, you can buy futures using DGTX only. This means that you’ll need to know where to buy ether, first of all, to purchase DGTX and then all your profits and losses will be denominated in DGTX.
As Adam highlighted in his AMA, you will be buying a perpetual swap contract, which will be a dollar’s worth of DGTX tokens and has no expiration date. We are still finalizing the futures contract specifications, however, they will be essentially the same as other major futures exchanges such as BitMEX and Bybit to make it easier for their traders to switch over to Digitex. We want to make it as simple as possible to create winning traders and to allow them to trade successfully. 
Skilled traders are used to trading futures for profit. It takes time and discipline, but even you’re just starting out, earning some extra income from day trading futures is certainly within your reach, especially on a platform that charges no commissions and has no mechanical edge working against you.

Latest News

Changing the Fundamentals of Futures Trading 5

Changing the Fundamentals of Futures Trading

Digitex Futures
Trading
• Dave Reiter
August 12, 2019

As a general rule, people struggle with change. The futures trading industry is a perfect example of a business that isn’t known for its ability to reshape itself. It’s continued to operate more or less in the same manner since its inception in 1848. That is, until now. Digitex is working to bring unprecedented disruption to the futures markets, and here’s how. 
The Chicago Board of Trade (CBOT) was founded 170 years ago, on April 3, 1848. Over the years since then, the futures industry has experienced very little disruption. However, thanks to blockchain technology, smart contracts, and digital currencies, the futures industry is on the verge of undergoing a radical transformation. In fact, the entire financial services sector will experience major adjustments as blockchain technology transitions into our daily lives.  
One of the more exciting changes to occur within the financial futures market is the world-first launch of commission-free trading by Digitex Futures exchange. Digitex is pioneering the use of its own native currency (DGTX) combined with Ethereum technology to create a zero-fee trading environment. 
On the Digitex exchange, all customers will use DGTX to buy and sell crypto futures contracts. Furthermore, DGTX offers a “double bonus” to traders who use the Digitex Exchange. In addition to serving as a token to facilitate trades on the Digitex exchange, we also expect that DGTX will rise in value based on increased demand from Digitex traders. 
Therefore, the DGTX token is the magic ingredient which enables Digitex to offer the first-ever commission-free exchange. This sets us apart from all other futures exchanges that have come and gone over the last 170 years.

The “Traditional” Role of The Broker is Being Eliminated    

The DGTX token economy model isn’t the only reason that the futures industry is on the verge of undergoing a radical transformation. As Digitex forges ahead with a commission-free exchange, it’s likely that the role of the broker within the futures industry will eventually become redundant. 
The traditional role of the broker is to serve as the “middleman” between the customer and the brokerage firm. This particular model has been in place since the CBOT was established in 1848.    
The majority of customers who have a brokerage account are “introduced” to the brokerage firm by a broker who has an “Introducing Broker Agreement” with the brokerage firm. These brokers are known as introducing brokers (IB). Essentially, the IB is responsible for onboarding the new customer to the brokerage firm’s trading platform. 
Additionally, the IB is charged with the task of handling all customer service related questions. In exchange for providing these services, the IB receives a percentage of the commission paid by the customer to the brokerage firm. Generally speaking, the IB receives 20% of the gross commission collected by the brokerage firm.
Thanks to the peer-to-peer connectivity of blockchain technology and digital currencies, brokerage firms are slowly beginning to realize that using a broker as an intermediary will no longer be profitable going forward. In fact, a few brokerage firms have eliminated their existing Introducing Broker Agreements. They are removing brokers from the equation as they attempt to reduce their expenses.
As a general rule, the brokerage industry has a history of resisting change. This explains why the broader futures industry has remained largely unchanged for the past several decades. 
Beginning in the mid-1990s, the commodity brokerage industry was forced to face the fact that pit trading would be replaced by electronic trading. Of course, the industry was not in favor of this transformation. But, despite a great deal of pushback, electronic trading eventually took precedence over pit traders and floor brokers.
However, it took almost 10 years for the entire transformation to occur. It should come as no big surprise that electronic trading has proven to be exponentially superior to the old method of using pit traders. This example illustrates why it’s never a good idea to resist the forward progress of technology.  

Digitex is Blazing a New Trail             

Not only is Digitex abandoning the traditional model of the brokerage industry, but we are also introducing the next generation of electronic trading. Digitex will offer a completely new platform with a cutting edge, intuitive one-click trading interface. 
As you can see, all of these new features introduced by Digitex are incredibly customer friendly. The entire Digitex team is laser-focused on creating the most trader-friendly experience possible.
A commission-free platform will completely alter the way traders and exchanges interact with one another in terms of trading activity and trading duration. Adam Todd, the founder, and CEO of Digitex, has always wanted to create a commission-free exchange that will level the playing field for profitable trading among short-term traders and day traders. 
Adam has a history of successful day trading. However, he always felt that long-term traders had a disproportionate advantage over day traders due to excessive fees and commissions that stack up for frequent traders.
This model actually penalizes those traders who are providing more liquidity, and more business to the exchange. Effectively, it’s a practice of charging your best and most loyal customers more. This is what inspired Adam to launch Digitex.

Digitex Continues to Move Forward  

Officially, Digitex has been in existence since its ICO on 15 January 2018. During the past 18 months, Digitex has experienced some setbacks, which is common for any start-up company. Despite its setbacks, the entire Digitex team continues to drive towards the goal of becoming the first zero-fee crypto futures exchange.
Being the first at anything is never easy because there’s no playbook to follow. Digitex must do all of the heavy liftings to build a commission-free exchange from the ground up. 
In addition to the hard-working Digitex team, the company is working with Moscow-based SmartDec for developing and programming the futures exchange and trading platform. SmartDec is a highly successful company specializing in software development, smart contract development, and software auditing. Now, Adam and other members of the Digitex team are working side-by-side with SmartDec in Moscow to ensure a seamless lead up to launch. 
We’re continuing to pioneer many brand-new concepts even within the cryptocurrency space. Digitex is one of the only blockchain startups to implement a Treasury, which ensures a continuous, sustainable stream of funding for our exchange over the next two years. We’re also implementing the Digitex DAO, so our users, DGTX token holders, will have voting rights over the exchange.
So our message to the futures industry – watch out! Digitex is on a path to disrupt the status quo. We’re providing traders with every incentive to break with tradition and enjoy the benefits of commission-free trading on a cutting-edge platform. And where we lead, others will surely follow. 
Check out our handy guide and learn to trade futures.
Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

August 12, 2019
Digitex Futures
Trading

Changing the Fundamentals of Futures Trading

Dave Reiter
Changing the Fundamentals of Futures Trading 6

As a general rule, people struggle with change. The futures trading industry is a perfect example of a business that isn’t known for its ability to reshape itself. It’s continued to operate more or less in the same manner since its inception in 1848. That is, until now. Digitex is working to bring unprecedented disruption to the futures markets, and here’s how. 
The Chicago Board of Trade (CBOT) was founded 170 years ago, on April 3, 1848. Over the years since then, the futures industry has experienced very little disruption. However, thanks to blockchain technology, smart contracts, and digital currencies, the futures industry is on the verge of undergoing a radical transformation. In fact, the entire financial services sector will experience major adjustments as blockchain technology transitions into our daily lives.  
One of the more exciting changes to occur within the financial futures market is the world-first launch of commission-free trading by Digitex Futures exchange. Digitex is pioneering the use of its own native currency (DGTX) combined with Ethereum technology to create a zero-fee trading environment. 
On the Digitex exchange, all customers will use DGTX to buy and sell crypto futures contracts. Furthermore, DGTX offers a “double bonus” to traders who use the Digitex Exchange. In addition to serving as a token to facilitate trades on the Digitex exchange, we also expect that DGTX will rise in value based on increased demand from Digitex traders. 
Therefore, the DGTX token is the magic ingredient which enables Digitex to offer the first-ever commission-free exchange. This sets us apart from all other futures exchanges that have come and gone over the last 170 years.

The “Traditional” Role of The Broker is Being Eliminated    

The DGTX token economy model isn’t the only reason that the futures industry is on the verge of undergoing a radical transformation. As Digitex forges ahead with a commission-free exchange, it’s likely that the role of the broker within the futures industry will eventually become redundant. 
The traditional role of the broker is to serve as the “middleman” between the customer and the brokerage firm. This particular model has been in place since the CBOT was established in 1848.    
The majority of customers who have a brokerage account are “introduced” to the brokerage firm by a broker who has an “Introducing Broker Agreement” with the brokerage firm. These brokers are known as introducing brokers (IB). Essentially, the IB is responsible for onboarding the new customer to the brokerage firm’s trading platform. 
Additionally, the IB is charged with the task of handling all customer service related questions. In exchange for providing these services, the IB receives a percentage of the commission paid by the customer to the brokerage firm. Generally speaking, the IB receives 20% of the gross commission collected by the brokerage firm.
Thanks to the peer-to-peer connectivity of blockchain technology and digital currencies, brokerage firms are slowly beginning to realize that using a broker as an intermediary will no longer be profitable going forward. In fact, a few brokerage firms have eliminated their existing Introducing Broker Agreements. They are removing brokers from the equation as they attempt to reduce their expenses.
As a general rule, the brokerage industry has a history of resisting change. This explains why the broader futures industry has remained largely unchanged for the past several decades. 
Beginning in the mid-1990s, the commodity brokerage industry was forced to face the fact that pit trading would be replaced by electronic trading. Of course, the industry was not in favor of this transformation. But, despite a great deal of pushback, electronic trading eventually took precedence over pit traders and floor brokers.
However, it took almost 10 years for the entire transformation to occur. It should come as no big surprise that electronic trading has proven to be exponentially superior to the old method of using pit traders. This example illustrates why it’s never a good idea to resist the forward progress of technology.  

Digitex is Blazing a New Trail             

Not only is Digitex abandoning the traditional model of the brokerage industry, but we are also introducing the next generation of electronic trading. Digitex will offer a completely new platform with a cutting edge, intuitive one-click trading interface. 
As you can see, all of these new features introduced by Digitex are incredibly customer friendly. The entire Digitex team is laser-focused on creating the most trader-friendly experience possible.
A commission-free platform will completely alter the way traders and exchanges interact with one another in terms of trading activity and trading duration. Adam Todd, the founder, and CEO of Digitex, has always wanted to create a commission-free exchange that will level the playing field for profitable trading among short-term traders and day traders. 
Adam has a history of successful day trading. However, he always felt that long-term traders had a disproportionate advantage over day traders due to excessive fees and commissions that stack up for frequent traders.
This model actually penalizes those traders who are providing more liquidity, and more business to the exchange. Effectively, it’s a practice of charging your best and most loyal customers more. This is what inspired Adam to launch Digitex.

Digitex Continues to Move Forward  

Officially, Digitex has been in existence since its ICO on 15 January 2018. During the past 18 months, Digitex has experienced some setbacks, which is common for any start-up company. Despite its setbacks, the entire Digitex team continues to drive towards the goal of becoming the first zero-fee crypto futures exchange.
Being the first at anything is never easy because there’s no playbook to follow. Digitex must do all of the heavy liftings to build a commission-free exchange from the ground up. 
In addition to the hard-working Digitex team, the company is working with Moscow-based SmartDec for developing and programming the futures exchange and trading platform. SmartDec is a highly successful company specializing in software development, smart contract development, and software auditing. Now, Adam and other members of the Digitex team are working side-by-side with SmartDec in Moscow to ensure a seamless lead up to launch. 
We’re continuing to pioneer many brand-new concepts even within the cryptocurrency space. Digitex is one of the only blockchain startups to implement a Treasury, which ensures a continuous, sustainable stream of funding for our exchange over the next two years. We’re also implementing the Digitex DAO, so our users, DGTX token holders, will have voting rights over the exchange.
So our message to the futures industry – watch out! Digitex is on a path to disrupt the status quo. We’re providing traders with every incentive to break with tradition and enjoy the benefits of commission-free trading on a cutting-edge platform. And where we lead, others will surely follow. 
Check out our handy guide and learn to trade futures.
Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

Futures vs. Options - Which Should You Trade? 7

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? 8

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

A Basic Guide on How to Trade Futures 9

A Basic Guide on How to Trade Futures

Digitex Futures
Trading
• Sarah Rothrie
August 1, 2019

There was a time, not too long ago, when the only way to learn how to trade futures was by throwing yourself into a trading pit and just doing it. But traders today have a much better chance of success right out of the box. Why? Because the power of the internet means that longtime traders have the platforms to share their experiences and help beginners learn to trade futures – and win. Armed with a solid futures market education, even the newest of newbies can quickly start buying and selling alongside the top futures traders. 
In this article, we’ll walk through the basics of futures contracts and why futures are an excellent option for profitable trading. We’ll also cover the various futures markets, the art of choosing a trading platform and strategy, the benefits of investing in futures, and the mistakes to avoid for profitable futures trading. 

Futures Market Education 101 – About Futures

At the most basic level, a futures contract is a simple agreement to trade an asset at a defined point in the future, for an agreed price. In the first instance, futures emerged as a means of hedging against price fluctuations in the commodities markets. The first futures contracts were based on the agricultural markets, enabling farmers and their buyers to fix prices for harvests before the growing season started and protect against later market fluctuations.
Although commodities markets are still used by traders wanting to hedge on price, modern futures markets rely heavily on speculators. Speculators don’t want to take custody of the underlying asset; instead, they trade on price fluctuations. 
The presence of speculators created the futures markets as they exist today, in which futures contracts cover all kinds of assets beyond commodities. Futures are traded against stocks, indices, foreign currencies, and most recently, cryptocurrencies. 
Futures trading use margin and leverage to enhance the opportunity for profits. By borrowing funds from a broker or an exchange, you can magnify the potential for profits, although it also increases the risk exposure if the markets go against your trade.
Available leverage can vary widely between markets. For example, in the stock markets, leverage is limited to 2x, while in forex markets, it can be significantly higher.  In cryptocurrency futures markets, you can trade with up to 100x leverage. 
If you can learn how to trade futures successfully, they offer fantastic opportunities to make big money compared to other financial products or derivatives. For example, when trading options, there is better loss protection because you pay an up-front premium on an option. However, while options may offer less risk, futures offer a far greater potential for profitability. 
So now that we know all the basics of futures, how do you decide which futures to trade? 

Markets Overview – Which Are the Best Futures to Trade? 

Obviously, deciding on the best futures to trade will depend on the trader. Choosing which markets you want to enter will mean you need to determine your risk appetite and your available resources for trading.  You’ll also need to think about how much time you have for trading each day, which includes time spent on market analysis and evaluation of your results. 
For the beginner individual investor, cryptocurrencies provide some of the best futures trading opportunities. A single BTC or ETH can be split down into tiny increments, so there are very low barriers to entry.
Digitex will be the world’s first commission-free futures trading platform, making it viable to adopt a strategy of scalping profits from multiple lower-value trades. Furthermore, crypto exchanges don’t rely on profit-siphoning brokers, although most of them with the sole exception of Digitex do charge fees. 
The cryptocurrency markets are volatile, which is bad news for long-term investors. But it’s fantastic news for short-term traders in futures contracts, who can use leverage to magnify gains from the volatility. 
Among the rest, forex futures also offer some comparable benefits to cryptocurrency futures, in that you can trade with high leverage and some currencies are volatile enough to provide significant gains. Stocks and indices tend to be far less volatile and offer lower leverage. 

Which is the Best Futures Trading Platform? 

Once you’ve decided which type of markets you want to trade, then the next step is deciding where to trade futures. Many finance websites regularly provide detailed futures trading systems review for all the major platforms. 
However, here are the major points to consider when choosing a futures trading system:

Availability of product

There’s no point in choosing a platform only to find out it doesn’t sell what you want to buy.

Fees and commissions

These will directly eat into your profits. So, the lower the fees, the better your chances of turning a profit. 

User interface

Especially for a beginner, it should be relatively intuitive and easy to use. More advanced traders may appreciate access to more charts and technical analysis tools.

Customer service 

If something goes wrong, or if you get locked out of your trading account, shoddy customer service is the difference between a good trading day and a terrible trading day. 

Security 

If the platform gets hacked, your funds may be at risk. Particularly in the cryptocurrency space, high-profile exchange hacks are all too common. Make sure your chosen exchange places the highest emphasis on fund security.
More often than not, choosing a trading platform means making a trade-off on one or more of these points. At Digitex, we are taking pride in building an exchange that excels on every single one of these criteria.
When Digitex launches, it will be the only free futures trading system where you don’t pay a per-trade commission. That alone puts it in pole position for becoming the best futures trading platform. 
But there’s lots more. Users will have access to our intuitive, one-click ladder trading interface. And we’re currently in the process of setting up a world-class back office to ensure that traders can focus on one thing – trading. 

How to Trade Futures Successfully – Mistakes to Avoid

We will soon publish a post on trading strategies and choosing the best futures trading system that goes into far more detail about specific approaches. So, until then, here are some general tips on how to day trade futures online. 

Failing to Manage Your Emotions

Trading psychology is a topic all by itself. But it’s a fact that if you don’t manage your emotions effectively, you run the risk that they’ll eventually get the better of you.
It’s natural to feel fear if you hear bad news about the markets or think it’s worth hanging onto a position to wring a few more dollars out of it. But basing trading decisions on these feelings is a sure-fire route to losing money.
To successfully day trade futures online, stick to your plan, and leave the emotions out of it. As you learn to trade futures will get easier with experience. 

Deviating from Your Plan

So you’ve created a plan, tested and tested again and now you’re on the live markets. A few losing trades in, and it’s inevitable that you’ll start to question your plan.
While it makes sense in some situations to revisit a plan, especially if new information comes in, don’t feel you need to deviate from a tried and tested plan just because the market has a wobble. If you’re confident that you’ve done your research and testing correctly, hold your nerve and stick to the plan. 

Not Protecting Yourself

If you’re trading longer-term then you should always have a stop-loss in place for every trade. Unless you’re superhuman, it’s impossible to monitor the markets at all times. Especially in the world of cryptocurrency, where trading goes on 24/7, often at a breakneck speed.
A stop-loss will mean that even if the markets perform unexpectedly, you won’t be stuck in a losing position while you’re asleep. But conversely, there’s also danger in taking your eye off the markets. 

Taking Your Eye off the Markets

Although you can’t possibly watch the markets 24/7, top futures traders always keep an eye on the big picture and stay abreast of the news. Make sure you hone your analytical skills, learn to read charts and use technical tools, and if you incorporate all of this into your trading plan, you’ll start to see more good days than bad ones. 
So hopefully, by now, you’ll feel you know enough of the basics to start planning your entry to the futures market! Being a full-time trader is demanding and it’s not always easy to develop futures trading strategies that work, but it’s incredibly rewarding. 
Only DGTX holders will be able to trade on the Digitex Futures exchange, as all trades will be denominated in DGTX tokens. You can buy tokens from one of our exchange partners, or via the Digitex Treasury. Buying from the Treasury is trustless and instant, meaning there’s no price slippage. 

August 1, 2019
Digitex Futures
Trading

A Basic Guide on How to Trade Futures

Sarah Rothrie
A Basic Guide on How to Trade Futures 10

There was a time, not too long ago, when the only way to learn how to trade futures was by throwing yourself into a trading pit and just doing it. But traders today have a much better chance of success right out of the box. Why? Because the power of the internet means that longtime traders have the platforms to share their experiences and help beginners learn to trade futures – and win. Armed with a solid futures market education, even the newest of newbies can quickly start buying and selling alongside the top futures traders. 
In this article, we’ll walk through the basics of futures contracts and why futures are an excellent option for profitable trading. We’ll also cover the various futures markets, the art of choosing a trading platform and strategy, the benefits of investing in futures, and the mistakes to avoid for profitable futures trading. 

Futures Market Education 101 – About Futures

At the most basic level, a futures contract is a simple agreement to trade an asset at a defined point in the future, for an agreed price. In the first instance, futures emerged as a means of hedging against price fluctuations in the commodities markets. The first futures contracts were based on the agricultural markets, enabling farmers and their buyers to fix prices for harvests before the growing season started and protect against later market fluctuations.
Although commodities markets are still used by traders wanting to hedge on price, modern futures markets rely heavily on speculators. Speculators don’t want to take custody of the underlying asset; instead, they trade on price fluctuations. 
The presence of speculators created the futures markets as they exist today, in which futures contracts cover all kinds of assets beyond commodities. Futures are traded against stocks, indices, foreign currencies, and most recently, cryptocurrencies. 
Futures trading use margin and leverage to enhance the opportunity for profits. By borrowing funds from a broker or an exchange, you can magnify the potential for profits, although it also increases the risk exposure if the markets go against your trade.
Available leverage can vary widely between markets. For example, in the stock markets, leverage is limited to 2x, while in forex markets, it can be significantly higher.  In cryptocurrency futures markets, you can trade with up to 100x leverage. 
If you can learn how to trade futures successfully, they offer fantastic opportunities to make big money compared to other financial products or derivatives. For example, when trading options, there is better loss protection because you pay an up-front premium on an option. However, while options may offer less risk, futures offer a far greater potential for profitability. 
So now that we know all the basics of futures, how do you decide which futures to trade? 

Markets Overview – Which Are the Best Futures to Trade? 

Obviously, deciding on the best futures to trade will depend on the trader. Choosing which markets you want to enter will mean you need to determine your risk appetite and your available resources for trading.  You’ll also need to think about how much time you have for trading each day, which includes time spent on market analysis and evaluation of your results. 
For the beginner individual investor, cryptocurrencies provide some of the best futures trading opportunities. A single BTC or ETH can be split down into tiny increments, so there are very low barriers to entry.
Digitex will be the world’s first commission-free futures trading platform, making it viable to adopt a strategy of scalping profits from multiple lower-value trades. Furthermore, crypto exchanges don’t rely on profit-siphoning brokers, although most of them with the sole exception of Digitex do charge fees. 
The cryptocurrency markets are volatile, which is bad news for long-term investors. But it’s fantastic news for short-term traders in futures contracts, who can use leverage to magnify gains from the volatility. 
Among the rest, forex futures also offer some comparable benefits to cryptocurrency futures, in that you can trade with high leverage and some currencies are volatile enough to provide significant gains. Stocks and indices tend to be far less volatile and offer lower leverage. 

Which is the Best Futures Trading Platform? 

Once you’ve decided which type of markets you want to trade, then the next step is deciding where to trade futures. Many finance websites regularly provide detailed futures trading systems review for all the major platforms. 
However, here are the major points to consider when choosing a futures trading system:

Availability of product

There’s no point in choosing a platform only to find out it doesn’t sell what you want to buy.

Fees and commissions

These will directly eat into your profits. So, the lower the fees, the better your chances of turning a profit. 

User interface

Especially for a beginner, it should be relatively intuitive and easy to use. More advanced traders may appreciate access to more charts and technical analysis tools.

Customer service 

If something goes wrong, or if you get locked out of your trading account, shoddy customer service is the difference between a good trading day and a terrible trading day. 

Security 

If the platform gets hacked, your funds may be at risk. Particularly in the cryptocurrency space, high-profile exchange hacks are all too common. Make sure your chosen exchange places the highest emphasis on fund security.
More often than not, choosing a trading platform means making a trade-off on one or more of these points. At Digitex, we are taking pride in building an exchange that excels on every single one of these criteria.
When Digitex launches, it will be the only free futures trading system where you don’t pay a per-trade commission. That alone puts it in pole position for becoming the best futures trading platform. 
But there’s lots more. Users will have access to our intuitive, one-click ladder trading interface. And we’re currently in the process of setting up a world-class back office to ensure that traders can focus on one thing – trading. 

How to Trade Futures Successfully – Mistakes to Avoid

We will soon publish a post on trading strategies and choosing the best futures trading system that goes into far more detail about specific approaches. So, until then, here are some general tips on how to day trade futures online. 

Failing to Manage Your Emotions

Trading psychology is a topic all by itself. But it’s a fact that if you don’t manage your emotions effectively, you run the risk that they’ll eventually get the better of you.
It’s natural to feel fear if you hear bad news about the markets or think it’s worth hanging onto a position to wring a few more dollars out of it. But basing trading decisions on these feelings is a sure-fire route to losing money.
To successfully day trade futures online, stick to your plan, and leave the emotions out of it. As you learn to trade futures will get easier with experience. 

Deviating from Your Plan

So you’ve created a plan, tested and tested again and now you’re on the live markets. A few losing trades in, and it’s inevitable that you’ll start to question your plan.
While it makes sense in some situations to revisit a plan, especially if new information comes in, don’t feel you need to deviate from a tried and tested plan just because the market has a wobble. If you’re confident that you’ve done your research and testing correctly, hold your nerve and stick to the plan. 

Not Protecting Yourself

If you’re trading longer-term then you should always have a stop-loss in place for every trade. Unless you’re superhuman, it’s impossible to monitor the markets at all times. Especially in the world of cryptocurrency, where trading goes on 24/7, often at a breakneck speed.
A stop-loss will mean that even if the markets perform unexpectedly, you won’t be stuck in a losing position while you’re asleep. But conversely, there’s also danger in taking your eye off the markets. 

Taking Your Eye off the Markets

Although you can’t possibly watch the markets 24/7, top futures traders always keep an eye on the big picture and stay abreast of the news. Make sure you hone your analytical skills, learn to read charts and use technical tools, and if you incorporate all of this into your trading plan, you’ll start to see more good days than bad ones. 
So hopefully, by now, you’ll feel you know enough of the basics to start planning your entry to the futures market! Being a full-time trader is demanding and it’s not always easy to develop futures trading strategies that work, but it’s incredibly rewarding. 
Only DGTX holders will be able to trade on the Digitex Futures exchange, as all trades will be denominated in DGTX tokens. You can buy tokens from one of our exchange partners, or via the Digitex Treasury. Buying from the Treasury is trustless and instant, meaning there’s no price slippage. 

Latest News

Digitex vs the Futures Trading Competition - How Do We Measure Up? 11

Digitex vs the Futures Trading Competition – How Do We Measure Up?

Digitex Futures
Trading
• Sarah Rothrie
February 27, 2019

Whether you’re a crypto newbie or a seasoned trader, there are plenty of cryptocurrency exchanges to choose from. The vast majority of new traders enter through the gateway of one of the major fiat-to-crypto exchanges such as Coinbase. However, for those looking to earn a profit, trading derivatives like active futures contracts offer the potential of far higher returns. Continue reading

February 27, 2019
Digitex Futures
Trading

Digitex vs the Futures Trading Competition – How Do We Measure Up?

Sarah Rothrie
Digitex vs the Futures Trading Competition - How Do We Measure Up? 12

Whether you’re a crypto newbie or a seasoned trader, there are plenty of cryptocurrency exchanges to choose from. The vast majority of new traders enter through the gateway of one of the major fiat-to-crypto exchanges such as Coinbase. However, for those looking to earn a profit, trading derivatives like active futures contracts offer the potential of far higher returns. Continue reading

Latest News