January 15, 2016

Margin Trading Bitcoin vs Trading Bitcoin Futures

Bitcoin Margin Trading Explained

Margin trading bitcoin is when you borrow money to leverage your bitcoin position either ‘Long’ or ‘Short’.  You are using those borrowed funds to trade in a live market with real bitcoins and fiat currency USD.   You can hold a trade open at a profit or loss indefinitely as long as your deposit account has enough margin to cover your unrealized losses and lender fees.

Bitfinex.com offers bitcoin margin trading with 3.33x Leverage – Lending fees accumulate daily.

Guide to trading bitcoin with leverage at Bitfinex

1Broker.com offers bitcoin trading with up to 5x Leverage – Pay 0.10-0.15% overnight financing fees.

Bitcoin Futures Trading Explained

Bitcoin futures are a derivative contract that represents the value of bitcoin at a time in the future.  The difference is that you are not trading actual bitcoins but contracts that will automatically be settled at a specified time.  At settlement your trade will liquidated whether you are at a profit or a loss.  Bitcoin derivatives are often more volatile and are considered high risk, but high leverage is the fastest way to make money as a professional trader.

okcoin 20x futures trading guide

OKCoin Futures Settlement Times

OKCoin.com has three separate bitcoin futures markets.  You can long or short with up to 20x leverage:

  1. Weekly – Settles Fridays at 8am UTC
  2. BiWeekly – Replaces the weekly contracts at settlement 1, then settles the following Friday 8am UTC.
  3. Quarterly – Settles once every 3 months on a Friday at 8am UTC

OKCoin offers up to 20x leverage on bitcoin futures contracts, and up to 10x leverage on litecoin futures contracts. OKCoin is designed for institutional traders, supports all trade order types and has API for firms who want to hedge bitcoin futures.  You can easily lower or raise your leverage for both long and short positions as the market shifts direction.

Guide to trading 20x bitcoin futures at OKCoin

BitMex Contract Settlement Times

BitMex.com has four separate bitcoin futures markets:

  1. Daily – 100x Bitcoin Futures Contracts – Settles 12pm UTC
  2. Weekly – 50x Bitcoin Futures Contracts – Settles Friday 12pm UTC
  3. Quarterly –  25x Bitcoin Futures Contracts – Settles once every 3 months on a Friday 12pm UTC
  4. Biannually – 25x Bitcoin Futures Contracts – Settles twice per year on a Friday 12pm UTC

Hedge Bitcoin Futures:  5x contract that settles weekly for anyone who wants to hedge derivatives with less risk.