Why is a USDT-M contract handy for a beginner?

Margin, profit and loss are in a dollar stablecoin. In USDT-M everything is in one dollar-like currency, so profit and risk are easy to count. Liquidation and losses work as anywhere else.

Someone lives in the UK and wants to trade crypto futures. What matters?

Selling them to retail clients has been banned since 2021. The FCA banned crypto derivatives for retail clients. Check your own country’s law before signing up, not after.

What did the 2022 FTX collapse teach?

Don’t keep all your money on one exchange and check Proof of Reserves. Even a big exchange can collapse. Money on an exchange is the exchange’s promise, so spread the risk and check reserves.

Crypto futures

Lesson 14 of 16 in the course “Futures from Zero”. Free, with animations and a quiz.

What’s special about crypto

Crypto futures are almost always perpetual contracts on bitcoin, ether and other coins. The market never closes, not at night, not at weekends. The clearest option is USDT-M: margin, profit and loss in USDT, a dollar stablecoin. There are also contracts margined in the coin itself, but for beginners they just add confusion. And the key point: crypto moves harder than gold and currencies, so keep leverage especially low here.

Are you even allowed

Crypto futures aren’t allowed everywhere. In the UK, selling them to retail clients has been banned since January 2021. The offshore exchanges in this course don’t serve US residents. The EU has strict retail rules, and brokers cap crypto CFD leverage at 1:2. Before signing up, check your country’s law and the exchange’s own terms. If you’re not allowed, practise in the simulator and go for gold, oil and currencies with a licensed broker.

How to pick an exchange

In 2022 the FTX exchange collapsed, and clients lost access to their money for years. Since then people check five things in a good exchange. Does it legally serve your country. Does it publish Proof of Reserves. Is there an insurance fund and account security: two-factor protection and a withdrawal address whitelist. Is liquidity high and are fees clear. And a rule for you: don’t keep all your money on one exchange.

Check yourself

Why is a USDT-M contract handy for a beginner?
Correct answer: Margin, profit and loss are in a dollar stablecoin. In USDT-M everything is in one dollar-like currency, so profit and risk are easy to count. Liquidation and losses work as anywhere else.
Someone lives in the UK and wants to trade crypto futures. What matters?
Correct answer: Selling them to retail clients has been banned since 2021. The FCA banned crypto derivatives for retail clients. Check your own country’s law before signing up, not after.
What did the 2022 FTX collapse teach?
Correct answer: Don’t keep all your money on one exchange and check Proof of Reserves. Even a big exchange can collapse. Money on an exchange is the exchange’s promise, so spread the risk and check reserves.

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