Futures Contract

Futures contracts are financial derivatives that allow traders to buy or sell an underlying asset at a predetermined price and time in the future. They work on an exchange like BitMEX by setting up an agreement between two parties to buy or sell an asset at a specific price on a future date.

On BitMEX, futures contracts are settled in Bitcoin, meaning traders must maintain a Bitcoin balance to trade them. These contracts also have a leverage component, allowing traders to open a much larger position than they could otherwise afford with their balance.

Trading bots can use futures contracts to implement a variety of strategies, such as hedging, arbitrage, and directional trades. For example, a bot could use futures contracts to bet on a specific cryptocurrency’s price increasing or decreasing over time, or to lock in profits by selling contracts against a long position.

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