Activités

What are crypto derivatives and what are they.

“In addition to the usual asset trading, there is an opportunity to use various financial instruments on the crypto market. One of them is crypto derivatives, which are essentially an agreement between a buyer and a seller for the future value of a digital asset. The participants in this transaction do not own the underlying asset for which the contract was drawn up. In this case, the subject of the transaction is the right to perform the contract. https://redot.com/derivatives/ is a reliable website where you can trade crypto with the lowest fees.
What are crypto derivatives
Futures is a contract to sell or buy an underlying asset in the future at a predetermined price. An example of such a contract is the pre-order of a product, in which the buyer pays a predetermined price, but receives the product later;
Forwards are practically the same as futures, however this contract is less standardized and is not traded on exchanges. Forwards are traded in the over-the-counter (OTC) markets, but this contract also involves the purchase of the underlying asset in the future at a set price;
Options are contracts that give you the right, but not the obligation, to buy or sell the underlying asset in the future at a predetermined price. An example of options in real life is to ask the seller to hold the goods for a while;
Swaps are a tool that includes two contracts at once. The first contract is aimed at the purchase or sale of the underlying asset at the time of its conclusion, and the second indicates the conditions for the sale or purchase of the underlying asset in the future. Swaps are considered a more complex version of futures. Example: the purchase of a product from a supplier and the conclusion of an agreement on the supply of the same product to the final consumer in the future;
CFD (contract for difference) is an agreement for the difference in prices of the underlying asset. If during the term of the contract the asset has fallen in price, then the buyer pays the difference. In the event of an increase in the price of an asset, it is paid by the seller. A simple example of such a contract is a special offer in some stores, in which the seller promises to refund the price difference if the buyer finds the product cheaper.
”