It is not only possible to make money, but there are hundreds of people worldwide who make a regular income from margin trading crypto at authentic cryptocurrencies futures exchanges. Margin money is demanded by exchanges or brokers who allow you to leverage by depositing only a percentage of the contract. It means you can trade with an amount you don’t possess, thereby increasing your exposure to the trade and making a windfall should the transaction go in your favor. However, just as stocks carry their risks, futures trades in cryptocurrencies too. If you don’t understand the market well enough, you may suffer huge losses as you have leveraged your position by borrowing from your broker.
Thus, you must know about the market pretty well to start your trade as there are both gains and risks in equal weights in the market. The futures margin is calculated based on the initial maximum potential loss a trader may incur in a single day on her portfolio. If the market for a particular type of cryptocurrency is very volatile, you need to deposit a greater initial margin as you enter into higher risk levels.
Yet some brokers or exchanges like here https://www.btcc.com/ can give you tips and suggestions, and you can cut down your risk levels.
Trading Carefully to Gain Traction
After registering at a reliable exchange, you may make good money each month if you play carefully. Of course, futures trades carry greater risks than other kinds of trade, yet when you make a profit, it is never too small either. Hence, if you are slightly prudent enough and make your moves little by little, you tend to make money despite making some losses.
Some brokers may have a different approach to the initial margin. It is also popular among traders as the second type of margin, or mark-to-market margin is collected for daily volatility in the futures price.
You may also settle a contract before expiry if you find the market going out of hands and you feel that your buy position is at risk with unusual market volatility. You can exit when your sell position may suffer losses.
For example, you may agree to buy one crypto coin for $5000 at a future date. If you’re a buyer, you will wish to have the cryptocurrency rise in market value, while the seller will want just the opposite. If you are a buyer and the prices fall, you stand to gain. In the case of the seller, if the prices fall, he stands to lose.
How to Close your Futures Position?
Although you can close your futures trade, you cannot square your position. Closing your futures position before the expiry date, you are liable to have your account either debited by the losses or credited by the gains.
To close your margin trading crypto position, you have to enter the opposite type of trade. If you are on a futures buy, you may cancel it with a sell and no longer have any position in the contract.