Delta-Exchange Best Crypto Derivative Trading Platform (1)

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altcoins
OVERVIEW A derivative is a class of financial
contracts that derive their value from the
performance of an underlying entity. Derivatives
where this underlying is a cryptocurrency or a
cryptoasset, e.g. Bitcoin, Ether etc are known as
cryptocurrency derivatives. Trading of crypto
derivatives does not entail actual buying or
selling of bitcoins or any other crypto. The
value of the derivative contract changed with the
change in price of the underlying cryptocurrency
and thus, trading derivatives in an alternative
way to get exposure to the underlying
cryptoasset or crypto currency . Types The
prominent types of derivative contracts include
futures, options, contracts for difference
(CFD), perpetual swaps and swaps. Derivative
contracts are traded both on exchanges and over
the counter (OTC). Exchange traded derivatives
are standardised contracts and are typically
very liquid. In contrast, OTC derivatives are
bespoke contracts between two parties.
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• Uses
• There are broadly, three categories for
  derivative use-cases. These are
• hedging this is essentially getting insurance
  for adverse price movements of an asset you
  already own. For e.g. miners may want to lock-in
  the price of mined bitcoin without selling it,
• speculation traders employ derivatives to create
  leveraged pay-off profiles based on their market
  view, and
• access traders that are not able to buy bitcoin
  or cryptocurrencies directly could potentially
  gain exposure to them via derivatives.
• Benefits

• For traders/ investors, derivatives offer several
  benefits which are unavailable in spot trading.
• These include
• ability to go both long and short, i.e. profit
  from both rising and falling market,
• leverage trading which enables a trader to take
  bigger positions and
• strong liquidity which reduces the cost of
  trading.

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