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Wednesday, September 27, 2023

Important Things You Must Know About BTC USDT Contracts

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Derivatives trading has been in use for quite a long time now, for traditional assets like stocks and bonds, and derivatives contracts may even have precious metals or real estate as their underlying assets. A while after Bitcoin’s launch in the year 2009, crypto derivatives contracts became a thing as well. As of 2022, digital asset derivatives make up a significant portion of any wise trader’s portfolio.

Now, the volatility of crypto assets is something we’re all aware of. Crypto futures are a specific kind of derivatives contract that can help investors protect their crypto holdings against this very volatility. How? Say you have some Bitcoin holdings in the spot market. To keep your funds from falling prey to sudden volatility in BTC’s price, you can use a Bitcoin futures contract to hedge against the loss you might suffer.

Bitcoin futures indeed offer a lot of benefits over the spot trading of crypto. But there are a few things to consider and keep in mind when you’re trading BTCUSDT contracts over an online crypto derivatives exchange like Delta. Let’s find out what they are.

Things to consider when trading BTCUSDT contracts

  • BTC USDT contracts are an excellent way to invest in bitcoin or other cryptocurrencies, as the price of bitcoin or other cryptocurrencies is usually more stable than the market overall.
  • With BTC USDT contracts, you are still taking the risk of sudden price changes, even when you’re not holding the actual crypto.
  • There is still the inherent volatility of individual cryptocurrencies laced with derivatives that have them as their underlying assets, and so you must learn the fundamentals of BTC USDT contracts before you get into trading so as to make profits regardless of the direction the price of BTC is heading in.
  • BTC USDT futures on Delta are quite capital-efficient as you can use leverage up to 100x. So while you have to pay a pretty significant amount when buying BTC in the spot markets, you can open a position in the BTC USDT futures market with only a fraction of that value.
  • You need to pay an initial amount (also known as margin) when entering a position in BTCUSDT futures. This amount is a percentage of your position’s total value, and it is used as collateral when you’re entering a futures trade.
  • If the maintenance margin limit for your BTCUSDT futures position is hit, your open position is at the risk of getting liquidated.
  • BTCUSDT perpetual futures don’t settle like usual futures contracts. So there is a system in place to make sure the index value and the futures value are coming together regularly- known as the ‘funding rate’. This is basically the price difference between the spot and futures markets. Investors might be paying or receiving the funding payments in regards to the kind of position they have open in the BTCUSDT perpetual futures market. So suppose if the funding rate is surging amidst a bull market, keeping a long position open would be a severe drag on your funds.
  • The more exposed you are to leverage, the more risks you have of suffering bad losses. Therefore a solid risk management plan is necessary as you head into BTCUSDT contracts trading.
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If you’re looking to invest in Bitcoin or Ethereum, you’ll need to be familiar with BTC USDT contracts. These contracts allow you to exchange Bitcoin or Ethereum for US dollars or toxic tokens, respectively. And while these contracts are usually simple to use, there are a few important things you need to know in order to avoid any potential complications.

First, make sure you understand the risks involved. While BTC USDT contracts offer a safe and secure way to invest in cryptocurrencies, there is always the risk of losing your money. Second, be sure to read the contract carefully before investing. There are often special conditions that must be met in order for the contract to be successful, and if you don’t understand them, you could wind up losing your money. Finally, make sure you have a backup plan in case things go wrong. If you’re not comfortable with the risks involved, don’t invest – there are plenty of other options available that are more safe and secure. By following these simple tips, you’ll be able to safely and successfully invest in Bitcoin or Ethereum using BTC USDT contracts.

You can sign up on Delta Exchange today to go forward with BTCUSDT futures trading. Then all you have to do is deposit funds to your exchange wallet to start with the actual trading; of course, you get to select an amount of leverage of your choosing for your position, going up to 100x for the BTCUSDT futures in particular.

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