How to do Futures Trading on WhiteBIT

What is futures trading?

Futures contracts, also known as futures, are financial derivatives that involve the purchase or sale of an asset at a fixed price in the future. Equities, commodities, and cryptocurrencies can all be used as assets in margin trading. Regardless of the purchase price at the time of the expiration, the parties are required to fulfill their obligations.

One of the most widely used trading instruments worldwide is futures. December 2017 saw the emergence of the first digital asset contracts on the Chicago Mercantile Exchange (CME Group). As a result, traders were able to start short positions in Bitcoin (BTC). Based on daily trading volumes, it is evident that BTC contracts have emerged as the most favored instrument among traders. They surpass spot trading volumes by several times.

In contrast to spot and margin trading, futures trading allows an individual to open long or short positions without actually holding the asset. The fundamental idea behind futures is to speculate on an asset’s price without actually owning it.

You can hedge your portfolio against significant market volatility and safeguard yourself in the event that an asset’s price drops by trading derivative financial instruments. When mining prices drop to a point where it is no longer profitable, miners can utilize the tool to sell futures for the quantity of assets that are available.

The following details are included in every contract:

1. Name, size, ticker, and type of contract.
2. Date of expiration (perpetual contracts excluded).
3. The value is determined by the underlying asset.
4. Employ leverage.
5. Money used for settlement.

How do futures work?

Standard and perpetual futures exist. The ones with a predetermined execution date are standard. They split up into two groups:

• The first group suggests that goods will be delivered at a set price and on a predetermined date. This contract has a price fixation and is centered on the delivery date. The exchange should result in a "fine" for the seller if they fail to deliver the goods to the buyer by the expiration date.

As an illustration, a trader purchased a 200 share futures contract from company X. On the date of expiration, each share is valued at $100. The trader’s account is credited with 200 shares, each worth $100, and the futures are debited on the day of execution.

• The second group suggests a straightforward resolution in which the underlying asset is not delivered. In this instance, the contract’s purchase price and strike price at expiration date will be determined by the exchange or a broker.

As an illustration, a trader purchased a one-month futures contract for one bitcoin at $10,000. The asset’s price increased to $12,000 a month later. Upon execution of the agreement, he will be entitled to a $2,000. The trader will lose $2,000 if the price falls to $8,000 in a month.
 

Both perpetual and standard futures are widespread in the crypto asset sphere.
 

What are perpetual futures?

Classic futures and perpetual futures are the same, but perpetual futures have no expiration date. These contracts can be traded on a regular basis.

Closing the position and profiting from the exchange rate differential between average entry and exit prices is the primary source of profit. The payment of the financing rate, which is based on the asset’s price at the time of calculation, is another component of the gain in trading perpetual contracts.

The difference between the asset’s price in the contract and its price on the spot market is used to calculate the funding rate, which is the periodic payments made to traders holding both long and short positions. For all available positions, it is computed every eight hours.

The financing mechanism enables traders to profit while maintaining the contract’s underlying asset price near market value. Users with short positions benefit from rising cryptocurrency prices, while those with long positions profit. Payments are made the other way around when prices decline.

For instance: You start a short position to sell one bitcoin because you think its price will drop. Meanwhile, the other trader opens a long position to purchase the asset because he believes its price will rise. The exchange will compute the difference between the asset’s spot price and the contract’s strike price every eight hours. Payouts to or from open positions will be given to traders in accordance with their positions and the price of the asset.

USER’S INTERFACE:

1. Trading Pairs: Shows the current contract underlying cryptos. Users can click here to switch to other varieties.
2. Trading Data and Funding Rate: Current price, highest price, lowest price, increase/decrease rate, and trading volume information within 24 hours. Display the current and next funding rates.
3. TradingView Price Trend: K-line chart of the price change of the current trading pair. On the left side, users can click to select drawing tools and indicators for technical analysis.
4. Orderbook and Transaction Data: Display current order book order book and real-time transaction order information.
5. Your latest completed transaction.
6. Order type: Users can choose from a limit order, market order and trigger order.
7. Operation panel: Allow users to make fund transfers and place orders.

What are the pros and cons of futures trading?

Advantages:

1. The capacity to establish contracts and set your own prices for any asset (including gold, oil, and cryptocurrency).
2. Because perpetual contracts are traded continuously, traders have greater flexibility.
3. The lowest requirement for openings in positions.
4. Possibility of earning as a result of leveraging.
5. Diversification of a portfolio and open position hedging.
6. Possibility of success in both bull and bear markets.

Drawbacks:

1. At the expiration date, the trader is required to transfer the asset to the second party at the agreed-upon price.
2. The extreme volatility of cryptocurrencies can cause money losses for traders.
3. Leverage can result in a significant increase in the cost of securing positions.

Perpetual futures on WhiteBIT

The following trading pairs are available for perpetual futures trading on WhiteBIT:

• BTC-PERP
• ETH-PERP
• ADA-PERP
• XRP-PERP
• DOGE-PERP
• LTC-PERP
• SHIB-PERP
• ETC-PERP
• APE-PERP
• SOL-PERP

Settlements are carried out in USDT because USDT-M is the available trading contract.

The number next to "x" in the phrase "2x, 5x, 10x leverage" indicates the proportion of your own money to borrowed money. Trading at a 1:2 ratio is thus possible with 2x leverage. In this instance, the loan from the exchange is double the initial sum.

For instance, you wish to purchase Bitcoin with 10 USDT. Assuming 1 BTC is equal to 10,000 USDT. For ten USDT, you can purchase 0.001 BTC. Assume, for the moment, that you have 200 USDT instead of 10 USDT after using 100x leverage. You can thus purchase 0.02 BTC.

Advantages of trading futures on WhiteBIT:

• The fees are 0.035% for takers, or those who lessen the liquidity of an exchange, and 0.01% for makers, or those who supply the liquidity to an exchange, which is less than on spot and margin trading.
• Leverage is scalable up to 100 times.
• 5.05 USDT is the minimum contract size.
• Hacken.io, a top cybersecurity service provider with a focus on blockchain technology, has audited WhiteBIT. Based on its audit and CER.live certification platform, WhiteBIT is ranked among the top three exchanges in terms of reliability and satisfies the strictest security requirements, earning the highest AAA rating in 2022.

How to Trade USDT-M Perpetual Futures on WhiteBIT (Web)

1. Sign in to the WhiteBIT website and select the "Trade"-"Futures" tab at the top of the page to go to the section.


2. From the list of futures on the left, choose the pair that you want.

3. Users have four options when opening a position: Limit Order, Market Order, Stop-Limit, and Stop-Market. Click Buy/Sell after entering the order’s quantity and price.

• Limit Order: Buyers and sellers determine the price on their own. Only when the market price hits the predetermined price will the order be filled. The limit order will keep waiting for the transaction in the order book if the market price falls short of the predetermined amount.
• Market Order: A market order transaction is one in which neither the purchase price nor the selling price are fixed. The user only needs to enter the order amount; the system will complete the transaction based on the most recent market price at the time of placement.
• Stop-Limit: To reduce risk, a stop-limit order combines the characteristics of a limit order and a stop. It is a conditional trade with a predetermined time frame. Investors use it as a financial tool to optimize profits and minimize losses. The implementation of a stop-limit order occurs when the stock price hits a predetermined level. A stop-limit order becomes a limit order that executes at a predetermined price (or higher) once the stop price is reached.
• Stop-Market: A stop market order is a planned order to purchase or sell shares of stock at the predefined price, also referred to as the stop price. Investors frequently use stop market orders to protect their gains or limit their losses in the event that the market moves against them.

1. Choose one of four options: Limit Order, Market Order, Stop-Limit, and Stop-Market.
2. Fill in the Price field.
3. Fill in the Amount field.
4. Click Buy/Sell.

4. View your order by selecting "Open orders" at the bottom of the page after placing it. Orders can be canceled prior to fulfillment. Upon completion, locate them under "Positions".

5. Click "Close" in the Operation column to end your position.

How to Trade USDT-M Perpetual Futures on WhiteBIT (App)

1. To access the section, log in to the WhiteBIT app and choose the "Futures" tab at the top of the page.

2. Select the desired pair from the list of futures on the left.


3. When opening a position, users can choose between Limit Order, Market Order, Stop-Limit, and Stop-Market. After inputting the order’s quantity and price, click Buy/Sell BTC.

• Limit Order: Buyers and sellers determine the price on their own. Only when the market price hits the predetermined price will the order be filled. The Limit Order will keep waiting for the transaction in the order book if the market price falls short of the predetermined amount.
• Market Order: A Market Order transaction is one in which neither the purchase price nor the selling price are fixed. The user only needs to enter the order amount; the system will complete the transaction based on the most recent market price at the time of placement.
• Stop-Limit: To reduce risk, a stop-limit order combines the characteristics of a limit order and a stop. It is a conditional trade with a predetermined time frame. Investors use it as a financial tool to optimize profits and minimize losses. The implementation of a Stop-Limit order occurs when the stock price hits a predetermined level. A Stop-Limit order becomes a limit order that executes at a predetermined price (or higher) once the stop price is reached.
• Stop-Market: A Stop-Market order is a planned order to purchase or sell shares of stock at the predefined price, also referred to as the stop price. Investors frequently use stop market orders to protect their gains or limit their losses in the event that the market moves against them.

1. Choose Buy/Sell option.
2. Choose one of four options: Limit Order, Market Order, Stop-Limit, and Stop-Market.
3. Fill in the Price field.
4. Fill in the Amount field.
5. Click Buy/Sell BTC.

4. After placing your order, choose "Open orders" at the bottom of the page to view it. Orders are refundable before they are fulfilled. After they’re finished, find them under "Positions".

5. To terminate your position, click "Close" in the Operation column.