Dated futures

Dated Futures: A Beginner's Guide

Welcome to the world of cryptocurrency trading! This guide will introduce you to "Dated Futures," a more advanced way to trade crypto beyond simply buying and holding Cryptocurrency. Dated Futures can be complex, so we'll break it down step-by-step for beginners.

What are Futures Contracts?

Imagine you're a farmer who expects to harvest wheat in three months. You want to lock in a price *now* to protect yourself from price drops. You could make an agreement with a baker to sell your wheat at a specific price in three months. That agreement is a “futures contract.”

In crypto, a futures contract is an agreement to buy or sell a specific cryptocurrency at a predetermined price on a future date. "Dated" futures refers to contracts with specific expiry dates – meaning the agreement *must* be settled on that date. Unlike Perpetual Futures, dated futures have a definitive end.

Think of it like this: you agree to buy 1 Bitcoin (BTC) for $30,000 on December 31st. It doesn't matter if Bitcoin is worth $25,000 or $40,000 on December 31st; you *must* buy it for $30,000.

Key Terms

**Contract Size:** The amount of cryptocurrency covered by one contract. For example, 1 BTC, 100 ETH, etc.
**Expiry Date:** The date the contract settles. After this date, the contract is no longer valid.
**Settlement Price:** The price of the cryptocurrency used to determine gains or losses at expiry. Often based on the Spot Price of the cryptocurrency.
**Margin:** The amount of money you need to hold in your account to open and maintain a futures position. It's like a security deposit.
**Leverage:** A tool that allows you to control a larger position with a smaller amount of capital. Leverage amplifies *both* profits *and* losses. (See Leverage Trading for more detail).
**Long Position:** Betting the price of the cryptocurrency will *increase*.
**Short Position:** Betting the price of the cryptocurrency will *decrease*.
**Funding Rate:** (Not applicable to dated futures, important for Perpetual Futures).
**Mark Price:** The current price used to calculate unrealized profit and loss, and to prevent unnecessary liquidations.

How Dated Futures Work: An Example

Let's say Bitcoin is currently trading at $27,000. You believe the price will rise by December 31st. You decide to buy a Bitcoin Dated Futures contract expiring on December 31st at $28,000.

**Scenario 1: Price Rises** On December 31st, Bitcoin is trading at $32,000. You profit $4,000 per Bitcoin (the difference between $32,000 and your contract price of $28,000).
**Scenario 2: Price Falls** On December 31st, Bitcoin is trading at $25,000. You lose $3,000 per Bitcoin (the difference between $25,000 and your contract price of $28,000).

Remember, leverage can amplify these gains and losses.

Dated Futures vs. Perpetual Futures

These are the two main types of futures contracts. Here's a quick comparison:

Feature	Dated Futures	Perpetual Futures
Expiry Date	Yes - Specific date	No - No expiry date
Settlement	Physical or Cash Settlement	Cash Settlement
Funding Rates	No	Yes - Periodic payments
Complexity	Slightly less complex	More complex due to funding rates

Practical Steps to Trading Dated Futures

1. **Choose an Exchange:** Several exchanges offer Dated Futures. Some popular options include Register now, Start trading, Join BingX, Open account, and BitMEX. Research each exchange and choose one that suits your needs. 2. **Create and Verify Your Account:** Follow the exchange’s instructions to create and verify your account. This usually involves providing personal information and completing KYC (Know Your Customer) procedures. 3. **Deposit Funds:** Deposit cryptocurrency or fiat currency into your account. 4. **Navigate to the Futures Market:** Find the Dated Futures section on the exchange. 5. **Select a Contract:** Choose the cryptocurrency and expiry date you want to trade. 6. **Determine Your Position Size:** Decide how much of the contract you want to buy or sell (based on your risk tolerance and capital). 7. **Set Your Leverage:** Carefully select your leverage. *Higher leverage means higher risk.* 8. **Place Your Order:** Choose between a market order (executed immediately at the best available price) or a limit order (executed only at a specific price). 9. **Monitor Your Position:** Continuously monitor your position and adjust as needed. 10. **Close Your Position:** Before the expiry date, close your position to realize your profits or cut your losses.

Risk Management

Dated Futures trading is inherently risky. Here are some crucial risk management tips:

**Use Stop-Loss Orders:** Automatically close your position if the price moves against you to limit your losses. See Stop-Loss Orders for more information.
**Manage Your Leverage:** Start with low leverage and increase it gradually as you gain experience.
**Diversify Your Portfolio:** Don't put all your eggs in one basket. See Portfolio Diversification.
**Understand the Expiry Date:** Be aware of the expiry date and plan accordingly.
**Don't Trade With Emotions:** Stick to your trading plan and avoid impulsive decisions.
**Only Risk What You Can Afford to Lose:** Never trade with money you need for essential expenses.

Resources for Further Learning

Conclusion

Dated Futures trading can be a powerful tool for experienced traders, but it's not for beginners without careful study and risk management. Start small, learn continuously, and always prioritize protecting your capital. Remember to practice on a demo account before trading with real money.

Recommended Crypto Exchanges

Exchange	Features	Sign Up
Binance	Largest exchange, 500+ coins	Sign Up - Register Now - CashBack 10% SPOT and Futures
BingX Futures	Copy trading	Join BingX - A lot of bonuses for registration on this exchange

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Register on Binance (Recommended for beginners)
Try Bybit (For futures trading)

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Join our Telegram community: @Crypto_futurestrading

⚠️ *Disclaimer: Cryptocurrency trading involves risk. Only invest what you can afford to lose.* ⚠️