What are crypto derivatives?

A derivative is a tradeable financial instrument that derives its value from an underlying asset, such as a cryptocurrency. It allows traders to get exposure to the price movement of an asset without actually owning it. The two main types of crypto derivatives are futures and options.

What are the benefits of using derivatives in the crypto space?

The use of derivatives will ensure that traders who previously were at the mercy of price fluctuations will now be able to protect themselves from any risk that might stem from such occurrence. The use of derivatives in the crypto space is not regulated, and this alone portends risks.

What are the best crypto exchanges for derivative trading?

Some of the exchanges that have become a favorite for derivative trading are BitMEX, Deribit, and BaseFEX. There’s one thing to take note of, and that is, derivative trading on crypto exchanges are yet to be regulated. Therefore, anyone making use of this method ought to be ready for any eventuality, be it positive or negative.

What are crypto options?

Crypto options are a type of derivative contract agreement that gives the holder the right (i.e., the option), but not the obligation, to buy or sell a specific underlying asset (such as a cryptocurrency) at a set price (referred to as the strike price) up until a set future date (also known as the expiry date ).