This article provides a brief summary of five key terms in cryptocurrency futures trading. These terms include:

1. Crypto trading pair: Refers to the two digital currencies used in a trade. Understanding trading pairs is crucial for formulating effective trading strategies and identifying opportunities in the market.

2. Leverage: Allows traders to work with more exposure using a small amount of money. However, leverage can lead to high profits as well as high losses, and should be used strategically considering market risks.

3. Margin call: Occurs when a trader's position is closed by the broker due to insufficient funds to meet the margin. This can result in significant losses and is a major risk in leveraged trading.

4. Funding rates: Periodic cash flows paid between long and short sides of perpetual futures contracts, helping to keep contract prices in line with the spot price of the underlying commodity. Funding rates are volatile and traders can profit by using certain opening positions based on rate changes.

5. Open interest: represents the total number of options contracts available in the market. It provides information about market demand for a particular security and can be a predictor of price changes.



Other News from Today