Demand for crypto derivative platforms has increased in recent years. According to a recent study, around $100 billion are traded in derivatives on a busy day. And now, with Delta Exchange offering a $30,000 sign-up bonus, you may be very well contributing to that demand.
But first – what exactly do we mean by derivatives?
What are Crypto Derivatives?
Derivatives are tradable securities or contracts whose value is determined by the underlying assets. Derivative assets include currencies, exchange rates, commodities, equities, and interest rates, to name a few. The buyer and seller of such contracts make different predictions about the trading price in the future. Both parties bet on the future value of the underlying assets to benefit.
Crypto derivatives are assets whose value is acquired from underlying crypto assets. Any cryptocurrency token (such as Bitcoin or altcoins) can be used as the underlying asset in crypto derivatives trading. Two traders enter into a contract speculating on the price of a cryptocurrency sometime in the near future. They agree on a selling/buying price for the cryptocurrency for the future, regardless of the actual pricing. As a result, investors can profit from changes in the underlying asset’s price by purchasing the currency at lower prices and selling it at a higher price.
Depending on the terms of a contract, crypto derivatives can be one of the following types:
- Futures: A futures contract legally binds an agreement between two parties to purchase or sell underlying assets at a future price and date. The contract is directly executed on a regulated exchange.
- Options: A trader has the choice, but not the responsibility, to buy or sell an underlying asset at a settled future date and price through an options contract.
- In contrast to futures and options, Perpetual contracts have no expiration or settlement date. Traders can leave their positions open forever in particular conditions (for example, if the account holds a certain quantity of a cryptocurrency).
- Swaps: Swaps is an agreement between two different parties to exchange cash flows at a later date based on a formula.
Advantages of trading Crypto Derivatives
- Low transaction costs: Derivative contracts help to minimize market transaction costs because they are risk management instruments. The cost of transactions in derivatives trading is often lower than in other securities such as spot trading.
- Risk management tool: The value of a derivative contract is directly proportional to the underlying crypto coin/token price. As a result, derivatives are used to hedge against the risks of shifting underlying asset prices. Mr. A, for example, buys a derivative contract whose value moves in the opposite direction of his crypto coin/token. He’ll be able to use earnings from the derivatives to offset losses in the underlying crypto coin/token.
- Market efficiency: Derivative trading is often high volume, and often involves traders doing arbitrage, which is crucial for ensuring that the market achieves equilibrium and that the prices of the underlying assets are accurate.
- Determines the price of an underlying asset: Derivative contracts are widely used to ascertain an underlying asset’s price.
- Risk can be transmitted through derivatives: Derivatives allow investors, organizations, and other parties to transfer risk to others.
Crypto derivatives can be traded on a cryptocurrency exchange platform like Delta Exchange.
Delta Exchange has a unique and modern interface that makes trading derivatives simple. It is an unregulated trading platform that allows users to trade anonymously all over the world.
Trading Crypto Derivatives on Delta Exchange
You can now easily trade derivatives, i.e., futures and options on Bitcoin and other top cryptocurrencies on Delta Exchange. The platform gives you a $30,000 trading bonus when you sign up!
The bonus is given as trading credits. Trading credits can be regarded as a free loan against the amount you deposit on the platform. While you can trade freely with the money, 20% of the profits are re-paid to the platform for the loan. The trading bonus cannot be withdrawn; you can withdraw your deposits by forfeiting the trading credits.
The trading bonus can be used for the following:
- To trade Futures, Perpetuals & Options.
- To participate in Delta’s Trade Farming competition. 25,000 DETO in rewards are distributed daily.
- You can subscribe to Robo Trading strategies to earn yields.
- To buy Bitcoin, Ethereum, DETO on Spot.
Click here to know more about the terms and conditions of using trading credits.
So, what are you waiting for? Sign up in Delta Exchange in under a minute and start trading today!