Financial and commodity derivatives—contracts that derive value from underlying traditional assets such as crude oil, gold, equities, and commodities—have grown exponentially in India in the last two decades. With the advent of crypto as an asset class, crypto futures trading is now available in India on CoinSwitch, India’s leading crypto platform. Crypto futures, a type of crypto derivative, is a legally binding agreement between two parties to buy or sell a specific crypto at a predetermined price on a specified future date. Perpetual futures do not expire, allowing the trader to hold them until exit.
CoinSwitch PRO, a professional crypto trading platform from CoinSwitch, provides traders with a seamless trading experience, including crypto futures trading. Launching a trustworthy crypto futures platform aligns with CoinSwitch’s vision to make money equal for all.
This blog post will discuss crypto futures in detail. We will simplify technical aspects related to crypto futures trading, such as margin, leverage, and funding fees, for you as we explain how crypto futures trading works on CoinSwitch PRO.
What are crypto futures?
Crypto futures are derivative contracts that allow traders to take a position on the future price of crypto without actually owning it. Crypto futures contracts obligate the buyer to purchase, or the seller to sell, a specific crypto asset at a predetermined price on a specific future date.
Coinswitch PRO provides a trustworthy platform for crypto futures traders to lock in prices and take positions on price movements with adequate leverage while managing risk.
Crypto traders can take long positions—buy the futures or short the crypto asset that is sold on perpetual futures contracts and hedge their spot holdings or benefit from the slightest market volatility. The beauty of crypto futures is that traders can sell the contract without having bought it earlier i.e., they can short the contract.
How are crypto futures different from traditional futures?
Futures contracts, by definition, allow traders to take a position on the future price of an asset. But here is how crypto futures contracts differ from futures contracts in traditional assets:
- Trading hours: Traditional financial markets have specific trading sessions, with holidays. Crypto is a 24/7 market that is always active.
- Volatility: Traders thrive in a volatile environment. The crypto market is more volatile than traditional financial markets.
- Contract Size: Futures contracts in traditional financial markets have fixed contract sizes to discourage retail participation. Crypto futures, on the other hand, do not have fixed contract sizes, encouraging traders to participate even with a small capital. CoinSwitch PRO offers flexible, smaller contracts that allow traders of all ranges to participate in crypto futures trading in India. Additionally, PRO facilitates up to 50x leverage, enabling traders to take larger positions amplifying profits.
- Perpetual futures contracts: Traditional futures contracts have an expiry date, but crypto futures contracts are perpetual contracts. This means that a trader is taking a never-ending position on the price of the underlying crypto asset.
Crypto futures on CoinSwitch PRO: Everything you need to know
CoinSwitch is the leading crypto platform in India, with over 2 crore registered users. CoinSwitch PRO, the platform for advanced users, offers a bouquet of products such as crypto Spot Trading, Crypto Futures, API Trading for Spot and Futures, SmartInvest, a crypto algo trading and investment product, and CoinSwitch Cares, a ₹600-crore asset recovery program for users impacted by the alleged WazirX cyber attack.
Crypto futures trading on CoinSwitch PRO allows users to take a position on the future price movements of cryptos without owning the underlying asset. Futures are leverage trades, and the CoinSwitch PRO platform offers up to 50x leverage, allowing traders to place bigger bets, resulting in larger gains. The platform offers around 480+ contracts, including BTC to USDT, XRP to USDT, DOGE to USDT, and more.
The CoinSwitch PRO platform also promises the lowest fees to crypto futures traders while providing them with the best liquidity sourced from international exchanges. This makes CoinSwitch PRO a trader’s preferred destination for crypto futures trading.
API Futures on CoinSwitch PRO
Besides crypto futures trading, CoinSwitch PRO also offers crypto futures API trading.
API is short for Application Programming Interface, a set of rules that describe how two applications interact. For crypto futures trading, the API allows you to connect with your exchange, giving you access to real-time market data and enabling you to make trades from your CoinSwitch PRO account.
Futures API trading helps crypto traders automate trades and take advantage of crypto market price changes even when they are unavailable or otherwise occupied.
Crypto traders can use the API trading functionality once the API trading interface is set up on their system. CoinSwitch PRO proactively updates and maintains the API trading documentation for traders. The API documentation for crypto futures is easy to understand and implement. As a crypto futures trader, you can explore the crypto future API trading to make full use of the crypto market momentum.
Benefits of Crypto Futures on CoinSwitch PRO
The CoinSwitch PRO platform is meant for crypto traders. Here are some of the benefits that the platform offers to crypto futures traders:
- Hedging – Crypto futures trading allows traders to hedge their crypto spot positions by placing counter bets on their holdings. CoinSwitch PRO has multiple trading pairs, allowing crypto traders and investors to hedge a wide range of crypto holdings.
- Benefit from the ups and downs of the crypto market – Crypto futures traders can profit from rising and falling markets by going long or short.
- Customizable leverage levels – Futures are leveraged products. Crypto traders can take large positions with a small initial investment. CoinSwitch PRO futures offer customizable leverage levels up to 50x, allowing users to choose the extent of leverage they are comfortable with.
Crypto futures: Key terms you need to know
Crypto futures have their benefits. However, it is essential to understand some commonly-used terms associated with crypto futures trade. Here are some of them:
- Long – buying the contract
- Short – selling the contract
- Perpetual Futures Contracts—Crypto futures have no expiry. They are never-ending bets on the price of the underlying asset.
- Margin – Money you need to deposit to open a trading position. It is the investment made out of your pocket.
- Leverage – The money borrowed to increase your trading power.
- Position size – Margin plus the leverage selected is the total size of the trade.
- Service Charges: Fees you pay for using the trading platform.
- Liquidation Charges – Fees that apply when your position is closed because you don’t have enough margin.
- Funding Fee – Funding fees are periodic payments exchanged between long and short-position holders in perpetual contracts. These fees maintain a balance between the perpetual contract price and the underlying asset’s spot price. A positive funding rate means longs pay shorts, while a negative rate means shorts pay longs. CoinSwitch PRO does not take a cut of the funding fee, which is passed on by CoinSwitch to a counterparty exchange you are trading with.
How to place your first Futures Trade on CoinSwitch PRO
Here is a step-by-step guide to help you place your first crypto futures trade on CoinSwitch PRO:
- Deposit INR in your CoinSwitch Wallet.
- Purchase USDT
- Once your INR deposit is successful, go to the PRO page.
- Click on the Spot trading option.
- Select the USDT/INR trading pair.
- Enter the amount of INR you wish to use to buy USDT and confirm your purchase. Make sure you review the exchange rate before finalizing the transaction.
- Alternatively, you can buy from the quick buy section on the futures page.
- Access the Futures Section
- After buying USDT
- Select Futures to access the futures trading interface.
- Browse the available futures contracts and select the one you wish to buy.
- Select the leverage you wish to take
- Place the amount of USDT required for the specific contract you intend to purchase.
- Buy the Futures Contract
- After confirming that you have sufficient USDT, enter the quantity.
- Review all the details, including the leverage options and any associated fees.
- Confirm your order to complete the purchase of the futures contract.
You can also watch our YouTube tutorial on mastering crypto futures trading. The video simplifies futures trading, making it easy to understand and actionable for users.
Note – CoinSwitch PRO only offers perpetual futures contracts using USDT. Ensure you have enough USDT in your wallet before making a purchase.
Risk management in crypto futures
Futures are leveraged trading products. While the judicious use of leverage can increase your profit potential from a trade, careless use of leverage without understanding the risk can lead to considerable loss when trading crypto futures. Therefore, traders should understand the potential downside or the loss potential and control the position size to the extent of their loss-bearing capacity.
Another way to limit the downside risk is placing take profit/stop-loss orders, as the position will automatically close at the specified price. Take-profit orders are the opposite of stop-loss orders that secure gains by closing positions when a desired profit level is reached. Diversification across different crypto trading pairs can also mitigate risk.
The platform allows traders to add margin to change the liquidation prices. This saves traders from getting liquidated. Traders can free up capital by removing the added margin if they are confident about the position not getting liquidated. This feature ensures a hassle-free trading experience for users.
Profits and losses in trading stem from human emotions of fear and greed. Emotional discipline and knowledge of one’s risk-taking ability can help traders avoid overusing leverage and spur-of-the-moment decisions, thus limiting losses.
Crypto Futures in a nutshell
CoinSwitch PRO offers a smooth and trustworthy crypto futures trading experience, enabling Indian traders to benefit from crypto market volatility while enjoying the benefits of customizable leverage levels. Several built-in features and benefits help users immensely, making CoinSwitch PRO the top choice for crypto futures traders.
