Derivatives on the Crypto Market — The Game for Acumen

Trade without knowledge is only “dead”

Dyedo Tikio
2 min readMay 22, 2021


— — — — — — — — — — — — — -

“The market corrects”, “Short BTC”, “Long catch up” are phrases that have been mentioned a lot in the past few days. Is trading Future really a good bait when the market corrects?

There are many people when they first start to play Future, they immediately have large profits, but gradually the deep loss or account burn occurs more and more. When there are large profits, many investors will be too confident in their own abilities. Forget the most basic principles like capital division or stop loss.

There are three things that traders on Derivatives contracts need to keep in mind:

Open interest:

✅ Open interest refers to the total number of unsettled derivatives contracts. For every buyer of a future contract there must be a seller. From the moment a buyer or seller opens a contract until the counterparty closes it, the contract is considered ‘open’.

✅ Open interest can help traders better understand whether the market is strengthening or weakening, rising or falling. This can also be used to identify specific trading opportunities.

2. StableCoin vs Margin Contract

👉 For crypto exchanges, most will allow up to 100x leverage. USDT orders are usually denominated in BTC. Meanwhile, margin token orders are shown in the contracts, which can be worth 1USD or 100USD depending on the exchange.

👉Therefore, for those who do not want to use Tether as collateral, they have other options such as BUSD on Binance or USDK on OKEx.

3. Funding rate volatility

Some exchanges allow clients to use very high leverage and it will put pressure on this ratio although this may not pose an overall risk as insurance funds are put in place for these situations. As a result, long trades are often penalized on those exchanges.


— — — — — — — — — — — — —