While you probably have heard about the Ethereum futures contract, there is a lot you need to know before trading. A futures contract lets you buy or sell assets at a future price. However, the asset that will be bought or sold at a future price is Ethereum, the second-largest cryptocurrency.
In Ethereum futures contracts, traders track price movements to determine their profit. After a contract expires, the seller and buyer owe it to themselves to pay the differences in their agreed contract price regardless of whether it is lower or higher. Here, you will learn the benefits of Ether futures, benefits, and how it works.
How Does Ethereum Futures Contract Work?
Ethereum Futures Contract lets traders secure the value of Ethereum from the market’s high volatility. It’s not a fallacy that cryptocurrency is a volatile asset, but traders reduce price fluctuation risks by getting into the futures contract.
Sometimes, individuals enter the future market to bet on price movements. However, in most cases, the contract is between a buyer who wants to purchase Ethereum and a seller who has agreed to sell Ether at a speculated future price and on an agreed date.
In an Ethereum futures contract, the seller should pay the buyer the percentage of the differences between the contract price and the eventual settlement price. The price differences are not paid in Ethereum because the parties involved may want to manage the risks of price changes or may choose to make profits in dollars off the price changes in the Ether contract.
Most of these Ethereum future contracts benefit from the liquidity market, which is quite profitable.
Why Should You Trade Ethereum Futures Contract?
- Leverage — Leveraging is another tool for traders to maximize capital efficiency. Leverage lets you attain an asset that’s beyond your buying power while ensuring that you earn higher profits. While leveraging an asset can maximize your gain, it can be risky if the market is not in your favor.
You can choose to leverage 10x or 50x your initial capital depending on your ability to bear risks. However, leverage remains an advantage for Ethereum futures traders as it helps them take advantage of price movements.
- Flexibility — what if you are not holding Ethereum? You can still trade in the Ethereum futures contract with the US dollar (USDT) and profit in US dollars. Traders without Ethereum can still speculate prices and bet on price movement.
Traders can choose to trade with centralized exchanges that offer transparent futures and discover prices. On the other hand, there are more opportunities for you to access the crypto markets while saving yourself the stress of creating digital wallets.
- Profitable — trading Ethereum futures contracts can be highly profitable. When you choose to create a long position, you maximize your profits.
Also, traders can make profits by trading with speculated prices or betting on price movements of Ethereum. As mentioned earlier, you will be earning your gains in US dollars when you trade with USDT.
- Liquidity — traders enjoy relative liquidity when trading Ethereum futures contracts. The market is liquid, so traders are provided with more opportunities to maximize gains. Ethereum futures contract lets you trade profitably in all market conditions.
Compared to the cryptocurrency market, where traders only gain during the bullish period when the price rises and bear losses when the market is bearish, the Ethereum futures contract is less risky and more profitable. Due to its liquidity, traders can start and exit a position without worrying about slippage.
How to Trade Ethereum on Futures Contract on Delta Exchange?
Delta Exchange allows traders to trade perpetual ETH future contracts with USDT. Traders can leverage 100x and, for every contract, the platform charges a taker fee of 0.05% and a maker fee of 0.02%. You can trade futures contracts in all market conditions by going long or short on Delta Exchange.
Ethereum futures contracts offer traders long positions to earn increased gain when the price of Ethereum rises and short positions when the price of Ethereum falls. The benefit of this feature is to ensure that you gain even when the market condition is poor.
When trading Ethereum futures contracts, Delta Exchange offers high profitability by offering traders low trading fees, tight spreads, and detailed order books on Ethereum contracts. Delta Exchange offers traders professional charts and advanced analysis tools to help identify early trading opportunities.
Risks are reduced, and traders can create hedging strategies by leveraging order and instruments. Also, Delta Exchange allows you to diversify your portfolio by offering several trading strategies through which traders can maximize their gains. So, all traders, regardless of their experience, can explore different trading strategies to their full potential.
Ethereum futures contract has made crypto trading more profitable and less risky. You can choose to use it as a hedge or wager on price movements. Traders can also gain profits in dollars instead of Ethereum. Investing in Ethereum futures is always a wise investment.
Traders are not the only ones to benefit from the Ethereum futures contract; one can decide to be a future investor and earn profits in price changes. ETH futures contract offers unique features such as liquidity, flexibility, leverage, and high profitability. Trade ETH futures to gain from all marketing conditions. Plus, you can always enter or quit any position at any time without slippage.
When does Ethereum Future Expire?
Ethereum futures contract has an agreed settlement period. Quarterly Ethereum futures expire quarterly, while perpetual ETH futures contract doesn’t expire until it’s eventually liquidated.
Where can I Trade ETH futures?
You can choose to trade ETH futures in any centralized exchange. Delta Exchange offers trader analytical tools and several trading strategies to trade ETH futures.
Is there a difference between perpetual and quarterly futures contracts?
Yes, there is a clear difference. A quarterly futures contract lets traders with an asset to sell to agree on future prices and has a specified period. On the other hand, perpetual futures contracts have no specific expiry date.