Trading futures can be advantageous in a number of ways compared to trading the underlying asset directly:
- Futures allow benefiting from price increases as well as declines
- Futures provide financial leverage
- Futures can be used to hedge price risk
- Futures are associated with low transaction fees
We currently list:
- Futures on the US Dollar price of Bitcoin
- Futures on the US Dollar price of Ether
- Futures on the US Dollar price of Litecoin
- Futures on the US Dollar price of Ripple XRP
- Futures on the US Dollar price of Bitcoin Cash
Futures come with a perpetual, monthly, quarterly, and semiannual* maturity schedule:
|Bitcoin-Dollar Futures||Ether-Dollar Futures||Litecoin-Dollar Futures||Ripple-Dollar Futures||Bitcoin Cash-Dollar Futures|
|Contract Size||1 US Dollar||1 US Dollar||1 US Dollar||1 US Dollar||1 US Dollar|
|Max Leverage||Up to 50x in most contracts, see Margin Schedule|
|Maturities||Perpetual, Monthly, Quarterly, Semiannual||Perpetual, Monthly, Quarterly, Semiannual||Perpetual, Monthly, Quarterly||Perpetual, Monthly, Quarterly||Perpetual, Monthly, Quarterly|
*Semiannual contracts for FI_BTCUSD and FI_ETHUSD only
**XBTUSD is used for logs download and Futures API
Inverse futures just mean that the payoff structure for your position is non-linear. The P&L is calculated so that the profit on the collateral you use matches the denomination of the contract as price adjusts.
For example, in Bitcoin-Dollar, because you are using Bitcoin as collateral and the contract is denominated in USD, as the price falls, the payout in Bitcoin has to be higher to match the Dollar value. This means that if the Bitcoin-Dollar price goes up 10% your payoff is 9.09% and if it goes down 10% your BTC payoff is 11.1%.
Example Inverse Futures:
You believe that the price of Bitcoin will increase against USD and buy 10,000 Bitcoin-Dollar Futures at 5,000 USD per Bitcoin. Every Futures has a contract size of 1 USD. The price of Bitcoin actually increases and you are able to sell the Futures at 6,000. Your PnL is calculated as:
( 1 / Entry Price - 1 / Exit Price ) * Position Size = (1 / 5,000 - 1 / 6,000) * 10,000 = 0.33 Bitcoin
Example Vanilla Futures:
You think that the price of Ripple XRP will increase against bitcoin and buy 10,000 Ripple-Bitcoin Futures at 0.00005 Bitcoin per Ripple XRP. Every Futures has a contract size of 1 XRP. The price of Ripple actually increases and you are able to sell the Futures at 0.00006. Your PnL is calculated as:
( Exit price - Entry price ) * Position Size = (0.00006 - 0.00005) * 10,000 = 0.10 Bitcoin
If you offer to trade an instrument on the platform, this offer is matched by the trading system with another client's offer to take the other side of that trade. This means that Kraken Futures does not act as trade counterparty.
Kraken Futures has discretion over whether any offer to buy or sell is successfully accepted, matched or executed and we may choose at our discretion to refuse an order and such refusal is notified to you. This is to ensure that trades do not lead to market manipulation or other unfair circumstances.