Crypto futures uk 6, 2022, the UK government banned crypto derivatives trading for retail investors. This move elicited a variety of reactions from the global crypto community, with many viewing it as an unwarranted limitation on their financial freedom. Others, however, viewed it as a step in the direction of safer and more regulated cryptocurrency trading practices.
Crypto futures contracts are agreements that obligate the buyer and seller to exchange a certain amount of crypto at a specific date in the future. These instruments allow traders to speculate on crypto asset prices, providing them with a range of potential benefits such as hedging and leverage.
Crypto Futures in the UK: How to Get Started
A trader profits from a position in a cryptocurrency futures contract if they are right about the price of the underlying digital asset. They can either go long if they expect the price to rise or short if they believe that the price will decline. Traders must meet a minimum initial margin requirement before placing a trade.
Traders should always consider their risk-to-reward ratio when trading. This is calculated by dividing the potential loss of a trade by the potential profit and should be less than 1. The higher the risk-to-reward ratio, the more likely it is that the trade will be profitable.
The final settlement value for a Bitcoin futures contract is determined by the CME CF Bitcoin Reference Rate at 4:00 p.m. London time on the last day of the contract month that is a business day in both London and New York.