Compared to spot trading, cryptocurrency futures trading is very demanding in nature. It requires the right skill and platform to succeed in the market.
The interesting part is that the trades are made on borrowed funds (leverage), making it riskier but rewarding. In case of loss, you’ve to pay the amount back to the exchange with interest.
In cryptocurrency futures trading, timing, skills, and exchange platforms are crucial to profit from the market; else it will break your back.
Therefore, you need to select the exchange that offers advanced trading tools, best-in-class liquidity, a clean interface, and execute orders quickly.
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Top Crypto Futures Trading Platforms
|Best Crypto Trading Platform with Leverage||Quick Links|
|ByBit [Get Deposit Bonus upto $1010]||Trade Now|
|PrimeXBT [Get 35% Deposit Bonus]||Trade Now|
|FTX [101X Leverage]||Trade Now|
|Phemex [100x Leverage]||Trade Now|
|Binance [125x Leverage On Bitcoin]||Trade Now|
|Stormgain [Get upto 200X Leverage]||Trade Now|
Bybit is a Singapore-based global crypto futures exchange launched in March 2018 and is credited for increasing retail participation in the futures market.
It is one of the fastest-growing crypto derivatives exchanges in the market and is trusted by over 1.6 million users. And is constantly ranked within the top 5 crypto futures exchanges by trading volume.
The exchange offers to trade three different futures markets- Inverse Perpetual Futures (BTCUSD, ETHUSD, XRPUSD, EOSUSD), Linear Perpetual Contracts (BTCUSDT, ETHUSDT, BCHLINK, LINKUSDT, LTCUSDT, XTZUSDT, ADAUSDT, DOTUSDT, UNIUSDT), and Inverse Futures Contract (BTCUSD quarterly).
Bybit offers maximum leverage of up to 100X on BTCUSD and BTCUSDT contracts and up to 50X on the rest of the futures contracts.
ByBit features a powerful and smart trading system suitable for high-frequency trading in the futures market. The transaction costs on the platform are minimal and competitive. It offers a maker rebate of 0.025% and charges a taker fee of 0.075%.
PrimeXBT is an award-winning bitcoin futures trading platform used worldwide and is well-renowned for its platform technology and trading infrastructure.
Based in Seychelles, PrimeXBT is a multi-asset exchange established in 2018 and offers cryptocurrency margin trading in five different cryptos, BTC, ETH, LTC, XRP, and EOS, and offers maximum leverage upto 100X. The minimum order size on the platform is 0.001BTC.
PrimeXBT Offer: Get a 35% additional bonus on the deposit of any amount of BTC on PrimeXBT. Meaning, if you put 1 BTC to trade on PrimeXBT, you will get an additional 0.35 BTC to trade. So in total, 1.35 BTC when you register using this exclusive deal for TheMoneyMongers readers.
The exchange is integrated with 12+ liquidity providers that offer high market liquidity and has an order execution speed of less than 7.12 ms. You can also take advantage of the PrimeXBT Covesting platform, which allows you to copy the trading strategies of successful traders and succeed in trading bitcoin futures.
The exchange has a flat fee structure and charges a commission of 0.05% on all types of trades. The daily funding rate on the platform differs with the change in market conditions.
FTX is a leading and popular cryptocurrency futures platform in the market and offers a wide range of futures trading options.
Launched in November 2019, FTX is incubated by Alameda Research (a top global liquidity provider) and is backed by industry bigwigs like Binance, Bitfinex, Circle, FGB Capital, etc.
The exchange offers to trade in 150 perpetual and quarterly futures, leverage tokens, BTC option, FTX’s proprietary MOVE contracts with a maximum leverage of up to 101X.
Other platform features include all futures contracts are settled in USD, flexible collateral (can take a position in BTC-perp by providing ETH as collateral), cross-margin, subaccounts, and a robust risk management framework.
The trading fees on the platform are based on the last 30-day trading volume and are divided into six-level. Under the first level, with a trading volume of less than $2,000,000, the maker fee is 0.02%, and the taker fee is 0.07%. FTT token holders are offered a discount on trading fees of up to 60% based on the quantum of holding.
Phemex is a Singapore-based spot and bitcoin futures exchange with a simple and easy UI suitable for beginner traders and professional traders.
The exchange was started by eight former Morgan Stanley executives and was launched in November 2019. The exchange has attracted over a million traders in a short span and gets an average daily trading volume of more than $1.1 billion.
Phemex offers leveraged trading in 15 different cryptocurrencies with a maximum leverage of up to 100X on BTC perp and up to 20X on the rest of the futures.
It is a high-performance trading platform that can process 300K transactions per second, with an order response time of less than 1 millisecond. Other advanced functionalities include FIX API for institutional traders and Sub-accounts for quantitative traders.
Regarding trading fees, the taker fee is 0.075% and offers a maker rebate of 0.025%.
Binance is the leading crypto spot exchange and is a preferred exchange for traders to buy bitcoin and other cryptocurrencies. It has set a benchmark in the market regarding product offering, trading volume, and leverage.
Binance got into the futures market in early 2020, and in a short span, it has become the top platform to trade in crypto derivatives and has deep liquidity. The gross daily trading volumes on the exchange are over $60 billion.
The Binance futures account has become the preferred choice for professional traders and institutional investors. It offers to trade in USDT-margined perpetual and quarterly futures, COIN-M (token margined with or without expiry futures contract), BTC options, and leveraged tokens. You can trade futures with a maximum leverage of up to 125X.
Other exchange features include an industry-leading matching engine that can manage 100,000 TPS with a minimum latency of 5ms, deep liquidity with minimum slippage, a trading platform compatible with multiple devices, a secure asset fund, etc.
It has the lowest fees structure among the top bitcoin exchanges and is divided into 10-levels, starting from 0.02% as maker fee and 0.04% as taker fee.
Kraken is a very old cryptocurrency exchange platform known for its amazing customer services and fast bank withdrawals.
It is a US-based exchange set up in 2011 and launched its spot exchange services in 2013. The futures segment offers perpetual futures trading in XBTUSD, ETHUSD, LTCUSD, BCHUSD, and XRPUSD with a maximum leverage of up to 50X.
With a decade of experience in the cryptosphere, Kraken has vastly improved the customer offering based on customer suggestions and evolving market requirements. The platform interface is customizable, has added tooltips and a simplified order form. It also facilitates discreet trading through its dark pool feature.
It has a tiered transaction fee structure, with maker fees starting from 0.02% and taker fees from 0.05%.
#7. Deribit (Best bitcoin futures exchange)
Deribit is one of the leading institutional-grade derivatives trading platforms that started its operation in 2016 and is based in the Netherlands.
The exchange offers to trade in traditional futures, perpetual futures, and options of both Bitcoin and Ethereum. It offers maximum leverage of 100X on bitcoin futures contracts, 50X on Ethereum contracts, and 10X on options. The minimum contract size on the platform is $10.
Deribit API integrated with third-party trading bot software like HAASONLINE, FMZ Quant, and Actant. The platform features dark and light mode and supports multiple order types like Limit, Market, Stop-limit, and Stop-market.
The exchange is known for low fees among other exchanges. It offers a maker rebate of 0.01% on BTC weekly futures and charges a taker fee of 0.05%. For BTC/ETH perpetual, the maker fee is NIL, and the taker fee is 0.05%. And, for BTC/ETH options, both maker and taker fee is 0.03%.
BitMEX is a Hong Kong-based bitcoin futures exchange that started its operation in 2014 and offers to trade in perpetual swaps, traditional futures contracts, and Quanto futures.
The first crypto exchange in the market to offer futures trading in Bitcoin with leverage as high as 100X. The exchange platform is more suitable for experienced and professional traders, and the average daily trade volume ranges between $2-3 billion.
The exchange’s trading engine is written in kdb+, a database, and toolset used by major banks in the high-frequency trading application, and is known for its speed and reliability.
BitMEX has a good selection of crypto futures contracts and fiat pairs that can be traded and has a low fees structure. It offers a maker rebate of 0.025% to market makers and charges a take fee of 0.075% on all trades.
Stormgain is a UK-based global crypto exchange established in 2019 and has a user-base of more than 120,000 customers.
You can buy bitcoin, trade cryptocurrencies, and bitcoin futures contracts with a maximum leverage of up to 300X, the highest among all other platforms. It also offers free crypto trading signals on the Stormgain mobile app, recommendations given by in-house technical experts having a forecast accuracy of 70%.
Stormgain doesn’t charge any transaction fees. Instead, it takes a profit share of 10% on profitable trades. The minimum contract value on the platform is 10 USDT and allows users to access an advanced charting system for technical analysis to identify trends and increase profitability.
You can add or deposit fiat currencies through Simplex or using credit/debit cards.
BaseFEX is a Seychelles-based crypto derivatives exchange established in Oct 2018 and is backed by some of the leading crypto VC firms, including ZhenFund, InBlockchain. The exchange offers to trade Bitcoin, Bitcoin Cash, ETH, XRP, LTC, and BNB futures with 100X perpetual swaps.
The exchange is known for its highest safety standard and has been A+ by Mozilla’s Observatory Test. It stores 100% of the user funds in a multisig cold wallet system. And, the system servers and API are designed to handle millions of trades per second, thus resulting in no system overload.
It’s a 100% no-KYC exchange, and the trading fee structure on the platform is divided into seven levels. The maker fee ranges from 0.02-0.005%, and the taker fee ranges from 0.06-0.03%.
Margex is a Seychelles-based futures trading platform founded in 2020 and is a privacy-oriented bitcoin futures platform.
The exchange offers to trade in six different crypto pairs- BTCUSD, ETHUSD, LTCUSD, XRPUSD, EOSUSD, and YFIUSD and offers maximum leverage of up to 100X and minimum leverage of 5X.
Margex works by combining liquidity of 12+ bitcoin exchanges in one place that helps it to offer deep market liquidity and reduce order slippage.
The exchange has given a special focus to enable secure trading on the platform. It uses a bank-grade multi-layer security standard, two-factor authentication to secure login, and MP Shield System for price manipulation protection.
Regarding fees, the maker fee on the platform is 0.019%, and the taker fee is 0.06%.
What is Crypto Futures Contracts Trading?
Unlike crypto spot trading, where you buy and sell digital assets such as Bitcoin and Ethereum for immediate delivery to have direct ownership, on the other hand, in crypto futures trading allows you to gain exposure to crypto assets without having to hold the underlying digital asset.
It is a contract with an agreement to buy or sell the specific cryptocurrency at a future date on an agreed price. The contract tracks the underlying index or asset and its price changes as per the change in the digital asset price.
Therefore, if a market participant thinks that at the time of expiration of the contract, the price of assets will rise, then he/she will initiate a long position and vice versa. At the expiry, the parties settle the contract, and it closes.
What makes bitcoin futures trading attractive is due to involvement of leverage. Using leverage allows you to significantly enhance the exposure and increase the profit percentage without putting funds upfront.
Let’s understand it with an example of bitcoin futures trading:
Suppose BTC is trading at around $30,000 level, and you expect the price to increase in the short term. Therefore, based on the analysis, you initiate a long position and buy 10 BTC futures contracts valued at $500 each.
And, every increase of $1,000 in BTC will result in the value of the bitcoin futures contracts increasing by 10%.
At the settlement of the contract, the price of Bitcoin reached $35,000, and the value of each futures contract increased to $804, a total profit of $3,040 on an investment of $5,000.
If you’ve used the leverage of 50X for a total 500 BTC futures contract, your profit would’ve been $30,400 on a trading capital of $5,000.
Therefore, trading crypto futures help you to amplify your profits by multiple times with the same trading capital compared to trading on the spot market.
For institutional investors, crypto futures help hedge their position in the spot market and minimize the risk of losses. For example, if an investor has huge Bitcoin exposure, he will take a short position in the bitcoin futures to limit his downside risks.
How to Trade Bitcoin Futures?
Trading in crypto futures is very different from trading in the spot market. You need to have a trading plan, risk management strategy, and understanding of the functioning of the derivatives market.
In crypto futures, there is no involvement of the crypto assets as all contracts are cash-settled. Therefore, you aren’t required to have the cryptocurrencies in the exchange wallet when trading in their futures. You need to have enough balance in your exchange account to initiate a position and cover the initial and maintenance margin.
Maintenance margin is the minimum amount of funds you need to keep in the account to cover your losses.
Now, let’s have a look, how to trade bitcoin futures.
- Step 1: Learn how to trade in bitcoin futures contracts
There are several types of futures products you can trade in the crypto market, like perpetual futures (without expiry), traditional futures (with expiry), inverse perpetual contracts, etc.
You need to understand the products in detail and find out the most suitable one for yourself.
Also, you need to know the factors that affect the price movement of crypto futures, like- how closely the futures price tracks the underlying asset, initial margin requirement, liquidity of the specific contract, and how traders and market makers are positioned in the market.
- Step 2: Building a trading strategy
For trading in bitcoin futures, you need to have a sound trading strategy based on your trading goals, risk profile, and market understanding.
It includes finding out technical indicators that generate credible trade signals, order types for executing trades, ways to monitor the market movement, and acceptable levels of risks for each trade.
Also, money management and position sizing are important elements in crypto futures trading.
If you’re facing difficulty building a trading strategy, you can use the copy trading feature offered by all the top crypto derivatives exchanges, which allows you to copy the trading strategies of successful traders.
- Step 3: Open an account with a bitcoin futures exchange
In bitcoin futures trading, good cryptocurrency exchanges play a significant role in long-term success. Select the exchange based on your trading goals, liquidity in the platform, strong platform infrastructure, and system security.
- Step 4: Test your trading plan.
Using the demo account feature offered by almost all trading platforms, test your trading plan to check how it functions in the real market environment.
Trading in a demo account is the best way to fine-tune your trading strategy without committing any funds and also helps you to get familiarized with the trading platform.
It saves you from initial anxiety about how your trading plan will perform in the live market.
- Step 5: Go Live
Once you are confident enough about your trading plan and have gained enough confidence to place trades in the live market, buy bitcoin to fund your account and start trading.
However, you should remember that trading in a demo account and live exchange account is completely different as your stakes are involved now, affecting trading behavior and performance.
What Happens When Futures Contracts Expire?
All crypto futures are cash-settled on the date of expiry, which means no transfer of cryptocurrencies is involved in the process of settlement of contracts.
For perpetual contracts, which do not have any expiry date, are executed on the will of the buyer or seller of the futures contract.
Tips to Get Started in Crypto Futures Contracts Trading
Being a highly volatile asset class, bitcoin futures trading comes with inherent risk, and there is a high possibility of losses if the market turns volatile or if you have misinterpreted the market.
The following are some tips for successful bitcoin futures trading:
#1. Establish a trading plan: Plan each trade carefully, including your entry point and profit objective. You should also have an exit plan in place if trades go wrong. If your profit objective is met, exit the trade soon.
The objective is to stick to the trading plan and not let emotions drive your trading decision.
#2. Start small and use leverage carefully: Do not go big on your first few trades; pace carefully. If you’re new to crypto futures trading, start trading with just 5 to 10 futures contracts and learn how the market functions. Never use leverage during the first few trades.
Develop a trading methodology and only if you are consistent and the trading strategy is working as per expectation, increase the position size or use leverage. Don’t risk more than you can afford to lose.
#3. Do not trade too many markets: Experienced traders do not trade too many markets and keep fine-tuning their strategies of a few markets.
Always trade the market that you understand and are comfortable with.
#4. Be patient: Markets are unpredictable and can sometimes drive you crazy with their price movement. Do your research and monitor the market to identify trade signals between such moves and execute your trading plan accordingly.
Don’t get perplexed by extreme short-term volatility, and always keep a long-term perspective of your trading goals.
Conclusion on derivatives exchanges
Selecting the best futures exchange is not an easy task. The Bitcoin exchanges discussed above are some of the best in the industry and make a major portion of the market.
You should select based on your requirements and platform preference. Choosing an exchange should not be based on higher leverage or trading fees, but it should be based on liquidity, platform interface, and speed.
And, before signing up, use the demo version of the futures trading platform to assess its suitability.
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