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What You Need To Know About Bitcoin Futures

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Bitcoin Futures

There are several ways that bitcoin investors can participate in the market. Bitcoin can be bought on dedicated exchanges or via peer-to-peer marketplaces. Some of the largest exchanges include Binance, Coinbase, and LocalBitcoins. You can also trade bitcoin in the futures market on the U.S. derivatives exchanges CBOE and CME. In this article, you will discover what bitcoin futures are and learn about some of the advantages of these instruments.

Understanding Futures Contracts

Before we begin our discussion of bitcoin futures, we should first take a moment to understand what a futures contract represents.

A futures contract is an agreement to buy or sell a particular asset at a specified price and at a specific date in the future.

Futures traders can either take a long position to buy a contract if they believe that the price of that specific asset will rise in the future or take a short position to sell a contract if they believe that the price of that specific asset will fall in the future.

Generally, futures products can be settled in one of two ways: cash or physically settlement. In the case of bitcoin futures, we won’t actually take delivery of the cryptocurrency but instead, the trade will be settled in cash within our brokerage account with either a credit if we made a profitable trade or a debit if we made a losing trade.

There are many different reasons why market participants engage in the futures market. Two of the main reasons include hedging and speculation. Hedgers try to reduce their overall risk of adverse price moves in the asset. They often do this by trying to lock in the current price of the asset if they believe that prices are likely to head higher in the future.

BTCLet’s take a look at how a hedger would utilise the futures market using a Clothing manufacturer as an example. Our clothing manufacturer needs to purchase large quantities of cotton as part of their production process. The price of cotton may be trading at that time at $90 per contract and the contract specification for CT (Cotton) is 50,000 lbs. of cotton per contract, and the minimum price move is $5 per point (1/100 of a cent).

The clothing manufacturer requires 10,000,000 lbs. for the next 6 months. This company who is considered a commercial interest has vast knowledge of the industry, and they have come to believe that the price of cotton is likely to rise substantially over the next 6 months to about $110 per contract. So, they decide that they should lock in the current price of cotton now at $90. They purchase 200 contracts of Cotton in the futures market to cover their requirements and lock in the current price.

If after six months later, the price of cotton rises to $110 per contract as they had anticipated, then they could have saved approx. $2,000,000 in the raw cost of cotton.

(110-90 = 20 x 100 = 2000 point move per contract x $ 5 point value = $ 10,000 per contract x 200 contracts) = $ 2,000,000.

The second major type of participant in the futures market is the speculator who is looking to make a profit from potential price swings, either up or down but is not interested in taking delivery of the traded contract. They are simply looking to buy low and sell high, or sell high and then buy back lower.

How to Trade Bitcoin Futures

Due to the huge volatility that bitcoin prices often experience, the margin requirements are typically much higher for bitcoin futures contracts as compared to other financial instruments. But regardless, futures traders can still take advantage of some additional leverage by trading bitcoin futures contracts.

We will discuss two major exchanges for trading bitcoin Futures. This includes the Chicago Board of Exchange (CBOE) and the Chicago Mercantile Exchange (CME).

Bitcoin futures opened for trading on the CBOE in early December 2017. Later that month, the CME made their debut into this market by offering their own bitcoin futures contracts. This was a big step forward for bitcoin enthusiasts. It marked an important transition in the minds of traders and investors. Instead of being considered as something on the fringe, bitcoin became more mainstream and more widely accepted. One of the reasons for this is that with the backing from both these major derivative exchanges, it brought about more transparency and liquidity into the market for bitcoin traders and investors.

There are some major differences between the bitcoin futures contract listed on the CBOE (symbol XBT) and the bitcoin futures contract listed on the CME (symbol BTC).

Let’s discuss some of the key differences:

Contract Size: XBT is equal to 1 bitcoin, BTC is equal to 5 bitcoins.

Minimum Price Fluctuation: XBT $10, BTC is $ 25

Minimum Margin Rates: XBT 40%, BTC 35%

Clearing: XBT is cleared by Options Clearing Corporation, BTC is cleared by CME ClearPort

Advantages of Bitcoin Futures

Bitcoin FuturesThere are many advantages for bitcoin investors who are interested in speculation to get involved in the market through the use of bitcoin futures contracts. 

Here are four major reasons why cryptocurrency traders and investors should consider bitcoin futures.

Better Liquidity  In the financial markets, liquidity is everything. You want to be able to buy and sell with minimal transaction costs and slippage. Trading bitcoin futures allows investors to obtain tight bid-ask spreads facilitated by the exchanges.

Increased Transparency  One of the biggest challenges for the bitcoin industry has been providing a high level of transparency and uniformity. Bitcoin futures contracts help solve this problem as each day the contracts are settled using a reference price.

Ability to Sell Short – When you participate in the futures market you can make money from both up moves and down moves. This is an excellent feature of the futures market. So, as a bitcoin speculator, you can buy low in anticipation of higher prices or you can sell high first and buy lower at some later point in anticipation of lower prices.

Regulated Exchanges – Although the word “regulation” tends to cause many bitcoin enthusiasts to twitch when it comes to speculating, some level of regulation may not be so bad after all. The bitcoin futures contracts that we have discussed are regulated by the CFTC (Commodity  Futures and Trading Commission). This has helped to bring more mainstream investors into the Bitcoin market, and the volume on these instruments has subsequently increased. This is a good thing, as greater volume and acceptance will provide for better liquidity and efficiency for speculators.

Summary

You should now have a good understanding of what bitcoin futures contracts are and how to get started with trading these instruments. It is important to keep in mind that bitcoin futures typically offer additional leverage, and so they should be traded responsibly with a keen eye on risk control.

This article was contributed by Vic Patel of Forex Training Group. He is a full-time trader with many years of experience in both the Foreign Exchange and Futures markets.

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How to Choose the Best Broker in South Africa

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Best Broker in South Africa

If you’re interested in forex or CFDs trading, you’ll need to find yourself an online broker. With so many brokers in South Africa to choose from, it can be hard to decide. That’s why in this article, you will learn how to find the best trading platform in South Africa.

Trading in South Africa

South Africa is one of the leading countries for forex trading, alongside the UK, Australia, and the USA. That’s why many brokers are now offering their services to South African residents.

The best thing about online trading though is that you can do it from any location. There are many traders from all across the world, selling and buying assets each day. Many brokers now offer mobile trading apps too, letting you trade directly from your smartphone. A great idea if you want to trade on the move.

Other points to check when choosing a broker include:

  • the minimum deposit
  • assets available
  • regulation licences

Out of these three things, the most important to check is regulation. All good forex and CFD broker platforms should be fully regulated and licenced.

Regulation

Regulation means that a platform is authorised to function as a broker service and monitored by an official regulatory body.

Some important regulation authorities include CySEC, the FSA (Seychelles Financial Services Authority) Financial Services Authority, and the United Kingdom’s Financial Conduct Authority (FCA).

South Africa also has an official regulation board, known as the FSCA (Financial Sector Conduct Authority.) All of these authorities set financial rules that brokers must follow. These rules are designed to protect traders from fraud and scams.

That’s why it’s important that any broker you choose holds at least one licence from one of these authorities. Selecting a regulated broker is the key to trading securely.

eToro South Africa

tradingeToro is a leading broker with millions of clients worldwide, including South Africa. The broker is known for offering a social trading platform which comes with unique tools, such as the CopyTrader tool.

This feature lets users automatically copy the trades of other successful traders. It’s a great option if you’re new to trading and want to learn from others. Other social features include the eToro newsfeed where you can discuss trading topics with members. It’s a great way to keep track of the latest market news.

Most importantly, eToro is a regulated broker, and they hold licences from CySEC and the FCA. So they’re a secure broker to open an account with.

Talking of the trading account, the platform is self-developed by the broker and is known for being very easy to use. It has a clear layout and comes with a great selection of forex and CFD assets to trade with. Some CFD instruments listed include cryptocurrencies, commodities stocks, and indices.

To start trading, you’ll need to open an account with the broker and fund your account. The broker only accepts USD, so if you deposit in ZAR a small conversion fee will be charged. The first minimum deposit amount is $200, but all deposits made after this start from $50.

IQ Option South Africa

Another great broker that we’d like to tell you about is IQ Option. Like eToro, they are also a major broker with many clients from various countries.

The broker was launched in Russia in 2013, and it has grown to be a very respected platform. Currently, the companies headquarters are based in Cyprus, and they hold regulation licences from both CySEC and the FSA. The main thing that IQ Option is known for is its incredibly low minimum deposit.

To start trading with this broker, you just need to deposit $10 to your account. Or if you wish to deposit in ZAR, the amount is 150 ZAR. This is a great amount if you want to start trading with a smaller percentage of funds.

It’s possible to make the deposit using a wide range of payment methods. For instance credit cards, wire transfer and electronic wallets like Skrill and PayPal are all accepted methods. The fact that you can deposit and withdraw in ZAR is great if you don’t want to pay currency conversion fees.

The platform is available for desktop or online use. There is also a free trading app available for iOS and Android devices. Instrument wise, IQ Option offers forex and CFD trading. Stocks, cryptocurrencies, options, commodities, and indices are available for you to trade as CFDs.

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What are the Betway Deposit Options?

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Betway Deposit Options

Betway, based in the U.K., is one of the leading online sports betting bookmarker sites today. The official sponsor of teams like West Ham United, people love Betway because they can bet on so many different sports at once, from cricket to football and more.

It’s no secret that sportsbooks have become one of the leading international bookmakers’ in various countries such as Kenya, Nigeria, Zambia, South Africa, and other countries. If you are wondering how to deposit money into your Betway account, you can start straight away too!

BetwayBetway offers a lot apart from sports betting such as casino games such as table games and slots. There is also live betting and virtual betting in sports such as soccer, horse and dog racing, basketball and tennis.   

Opening an account with the sportsbook is quite accessible since you will only require a username, an email or a mobile number and a password. Once you have verified your account, you are ready to start betting.

Betway Deposit Options

Betway is a versatile online betting shop because it offers various deposit methods for its users. So, how do you get the most out of Betway?

#1. Debit Card or Credit Card

A debit card is a convenient way of depositing your funds. You will instantly get your deposit plus the Betway charges will be transferred to your account.  You can deposit funds to your Betway account through the Visa, MasterCard, or even Electron.

All you need to do is click on the banking button on Betway, and deposit the money by entering your debit card details. Once you confirm the payment, the amount will be deposited to your Betway account – all in a few seconds.  And it’s not just debit cards we are talking about. Yes,, you can deposit funds to your Betway account through credit. Card payment can be made through two options:

  1. Visa
  2. MasterCard

The steps for storing funds through your card payment are the same as the one for the debit card.

#2. Neteller

Neteller is an e-wallet that is compatible with Betway. You can deposit funds in your Betway account using the following steps

  1. Now, just choose any of the Betway depositing options you have available.
  2. Enter your 12 digit Neteller number and six-digit Neteller ID.
  3. Enter your Betway password
  4. Enter the amount you have in mind
  5. Click Confirm.

#3. Skrill

Skrill is another e-wallet that works like Neteller. All you need is a debit it or a credit card to get started with your Skrill account, a reason many bookmakers love it. If you are looking for transferring money from your account, you can use bank transfer or online banking.

Just Select Skrill as your deposit method on your Betway account, enter the amount you would like to deposit, and deposit!

#3. PayPal

PayPal is another e-wallet that makes it easy to deposit to your Betway account. It is free of any charges, and you can deposit any amount you like seamlessly.

All these deposit options will deposit money to your Betway account.

*This article was contributed by an external media partner.*

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Forex Trading Indicators Providers – What to Look for When Searching for the Best Services

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forex trading indicators

When trading forex online, an excellent way to increase your earning potential to make use of so-called forex trading signals but the key is to find a forex trading indicators provider that is of the highest quality. 

Here are some tips for finding the best forex currency trading signals!

Accuracy

Of course, you need the vast majority of your trades to make a profit if you want to trade forex profitably in the long run. While no indication service can you 100 percent accurate signals that will generate you a profit every time it is important to look for one with a high accuracy rate. A high accuracy rate can potentially help you to boost your forex trading revenue so that you can earn more pips – not to mention more money – out of every trade.

Top Quality UI/UX

forex

One of many elements what things to look for having an online forex trading indication service are an excellent user interface and user experience. A top quality user dashboard might help with graphs, graphs, better-computerized indicators, and a better overall experience to assist you in operating and being successful.

The people place can also give you significant improvements in the signals, on crucial and technical examination and on distinct strategies that you might use to increase income using trading signals. An excellent user dashboard area can really make a transmitting service cost worthwhile and can really make all of the difference when it comes to trading effectively.

Great Customer Care

Needless to say, you always wish for great customer care in the case that you need assistance with the trading software. This might make a massive difference, and to be able to contact your dealer, as well as your forex signal expert, can be among the key requirements to success when it comes to trading forex.

Check Demos

One other thing to look for is an excellent trial offer. If a forex broker provides a free trial of their forex currency trading signals, test the trading service for all the above-mentioned points and you will quickly find out whether the company’s service is for you or not. 

An online forex currency trading platform can seem overwhelming at first. Hence, it is best to start out with a demo account to learn the ropes before embarking on your forex trading journey. 

If you can find a forex trading signals provider that scores high in all of the above-mentioned points, you should definitely consider giving it a try as it may not only help you to get started with forex trading but it may also help more experienced traders with the execution of their trading strategy.

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