Futures on Kwenta
Kwenta currently offers sUSD-margined Futures. These Futures contracts offer the following:
- Settlement in sUSD-pegged assets are denominated and settled in sUSD.
- Expiration: Perpetual
- Pricing: Each Futures contract specifies the base assets quantity delivered for a single contract, also known as "Contract Unit." For instance, BTC/sUSD or ETH/sUSD Futures contracts represent only one unit of their respective base asset, similar to spot markets.
sUSD will always be pegged to 1$ when using it to transact on Kwenta. Regardless of any 3rd party pricing.
sUSD-margined contracts are linear futures quoted and settled in sUSD. One of the critical benefits of sUSD settlement is that traders can easily calculate their returns. This makes sUSD-margined contracts more intuitive. For example, when you make 500 sUSD in profit, you can easily estimate that the profit is worth approximately $500 - since the value of 1 sUSD is pegged closely to 1 USD. A universal settlement currency, such as sUSD, also provides more flexibility. You can use the same settlement currency across various Futures contracts.
This eliminates the need to buy the underlying coins to fund Futures positions. You will not incur additional fees as no additional conversion is required when trading with sUSD. In times of elevated volatility, sUSD-margined contracts help reduce the risk. Traders won't need to worry about hedging their underlying collateral exposure.
- Trading Futures allows one to profit from both the up and downside of an asset.
- Futures allow for the use of leverage. This is the most sought-after advantage, as traders can execute orders at a lower cost than the matching spot market price.
- It allows for advanced trading methods.
- The high volatility in the crypto space can be a blessing or an agony. Market movement is something no one can guarantee. Due to the leverage involved, Futures is one of the most challenging trading tools. Traders, in turn, should trade them with a robust risk management strategy.
- Futures allow a trader to speculate on asset prices. Becoming familiar with the basics of Futures is a must. Futures trading can be lucrative if you apply risk management to avoid non-proportional losses.
In short, you should strategize and do your research before trading Futures and understand their advantages and risks. Trading Futures can result in significant financial loss; keep this in mind at all times:
Never invest more than you can afford to lose!