Contract trading is a way of profiting through a financial instrument without actually owning it. It’s a great way to hedge risk and multiply your returns, no matter in a bull or bear market. Trading during volatile times can be tricky, but also rewarding. This is why trading digital asset contracts can yield more profits compared to HODLing for the long term. Through contract trading on SnapEx, you can take profit on a daily basis instead of realizing your profits in months or years.
Here are 3 core benefits to contract trading:
- Hedge Risks
Investors who are holding digital assets can mitigate the risk of a falling price by simultaneously taking a “short” position on the asset in question. If the price falls, the “short” position will mitigate losses by providing additional revenue. Contract traders are also protected from the risk of owning a volatile asset, while being able to profit from its price movements.
- Speculate on Market Direction
Cryptocurrency contract trading brings with it the opportunity for real speculation to occur -- traders can make their opinions felt in the market with futures positions. Think the price of Bitcoin is going to the moon? Go extra long on futures and multiply your returns. Think Litecoin adoption is increasing? Put your money in and get short on Litecoin futures.
- Stabilize Price Fluctuations
With speculation comes stability as long term views of the markets play a more significant role. Whether you are a miner with expected Bitcoin flows or a Bitcoin ATM operator with inventory to manage, contract trading helps crypto merchants smoothen their exposure while being able to focus on their core business.