—— The First Step for Beginners to Understand FuturesTrading
In cryptocurrency trading, futures trading is often regarded as a field with a high entry barrier and significant risk. Many first-time users instinctively feel intimidated when they hear terms such as “futures,” “leverage,” or “liquidation,” assuming that these tools are only suitable for experienced traders.
However, in essence, futures trading is neither mysterious nor inherently difficult to understand. It is simply another way for traders to participate in market price movements.
Understanding what cryptocurrency futures trading is represents the most important first step for any beginner before entering the derivatives market. On major cryptocurrency exchanges such as BitMart, futures trading has become a primary way for users to engage with market volatility. Therefore, grasping its fundamental logic is especially important. Only by clearly understanding how futures trading works can traders decide whether it suits their needs and how to use it rationally.
The Fundamental Difference Between Futures Trading and Spot Trading
To understand futures trading, it is essential first to distinguish it from spot trading, which most users are already familiar with.
On platforms like BitMart, spot trading and futures trading are clearly separated into different trading sections, allowing users to choose based on their experience level and risk tolerance.
In spot trading, users buy and sell actual cryptocurrencies. For example, when a user purchases Bitcoin with USDT, the Bitcoin is transferred directly into the user’s account. If the price of Bitcoin rises, the user can sell it for a profit; if the price falls, the value of the held asset decreases accordingly. The core logic of spot trading is “own the asset first, then wait for price changes,” and profits can only be made when prices rise.
Futures trading, however, works in a completely different way. It does not involve the transfer of actual cryptocurrencies. Instead of trading Bitcoin itself, users trade a contract that is based on the price of Bitcoin. The value of this contract fluctuates with market prices, and profits and losses are settled by the system according to price movements.
Because of this structure, futures trading does not require users to hold the underlying cryptocurrency. Traders only need to provide a certain amount of margin to participate in price movements. This distinction represents the most fundamental difference between futures trading and spot trading.
Why Does Futures Trading Not Require Holding the Actual Cryptocurrency?
Many beginners naturally ask: If no cryptocurrency is being bought, how are profits and losses generated?
The answer lies in the nature of futures as financial derivatives. The value of a derivative does not come from owning the asset itself, but from changes in the asset’s price. Whether it is stock futures, commodity futures, or cryptocurrency futures, they all represent agreements based on futures price movements.
Take a Bitcoin contract as an example. When a user opens a contract position on BitMart, the system records an entry price. From that moment on, regardless of whether the price rises or falls, the system continuously calculates the unrealized profit or loss based on the difference between the current market price and the entry price. When the user closes the position, the profit or loss is settled into the account.
Throughout this entire process, Bitcoin itself is never actually bought or sold. Instead, both sides of the trade exchange value based on price fluctuations. This is precisely why futures trading can function without holding cryptocurrencies and why it is considered a more capital-efficient trading method.
The Core Logic of Futures Trading: Long and Short
On the BitMart futures trading interface, long and short positions are usually presented in a clear and intuitive way, helping beginners better understand how profits and losses work in different market directions.
All futures trading activities revolve around two basic actions: going long and going short.
When a trader believes that the price of a cryptocurrency will rise, they can choose to go long. This means opening a long position at the current price. If the price rises as expected, the position generates a profit; if the price falls, the position incurs a loss. For users transitioning from spot trading to futures trading, the logic of going long is often the easiest to understand.
In contrast, going short is a defining feature that distinguishes futures trading from spot trading. When a trader believes the price will fall, they can open a short position at the current price. If the market price declines, the short position becomes profitable; if the price rises, the position incurs a loss.
The ability to short allows traders to participate in declining markets, making futures trading useful under various market conditions.
Both Opportunity and Risk Exist in Futures Trading
Because futures trading does not require holding assets, supports both long and short positions, and improves capital efficiency through margin mechanisms, it has gained widespread adoption in the cryptocurrency market. Whether for short-term trading or risk hedging, futures trading offers flexible tools for different strategies.
However, it must be emphasized that futures trading is not a guaranteed way to make profits. When price predictions are incorrect, losses are equally amplified. This is why many beginners experience setbacks when entering the contract market without fully understanding its rules.
Therefore, before placing any trades, the most important step is not learning how to submit orders, but understanding what futures trading truly is, how it operates, and what risks and opportunities it entails.
Once these foundational concepts are clear, futures trading no longer feels like an intimidating black box. Instead, it becomes a transparent, rule-based trading method with a logical structure. In the following articles, we will further explain the differences between perpetual futures and delivery (futures) futures, helping beginners choose the type of contract that best suits their needs.
