How to Trade Crypto Futures on PrimeXBT in 2024

how to trade crypto futures on PrimeXBT

While often touted as complex, futures trading can lead to large gains for those who know how to trade futures on PrimeXBT, our top pick as the best platform to trade crypto futures today.

In this article we cover futures trading in detail, see why PrimeXBT is the best platform for trading futures, and give a step-by-step guide for how to trade crypto futures on PrimeXBT

Understanding Crypto Futures Trading

Explaining how crypto futures trading works first requires exploring what futures contracts are in the first place.

What are Futures Contracts?

Futures contracts are an agreement between two parties, a buyer and a seller, to buy a particular quantity of an asset, at a particular price, at a particular time in the future. They are legally binding and allow traders to speculate on an underlying asset.

Futures contracts are traded on dedicated futures markets, exist for a wide array of assets, and are exchanged on exchanges around the world. They were traditionally used for commodities, like oil, gold, and corn, but futures markets have since been extended to include currencies, stock indexes, energy, and government bonds.

Crypto futures are just another asset class in which futures contracts and trading are now offered.

The Origin of Futures

While futures are said to have first been used in England in the 16th century, the first recorded use of futures markets as we know them today was at the Dōjima rice market, Ōsaka, Japan, in the 18th century. At this time, rice was used to pay the bannermen (administrators) who were, as it happened, Samurai warriors.

Futures trading was initially illegal as it was said to drive up the price of rice, however, with the price of rice dropping drastically lower the ruler chose to authorize the trading of such bills to reverse the decline.

For those wondering what are crypto derivatives, crypto futures are a form of crypto derivative, which are trading products that derive their value from a crypto asset. These allow traders to speculate on the price of that crypto asset without having to own that underlying asset—helpful for traders who don’t want to have to deal with securely storing digital assets.

What Happens When a Futures Contract Expires?

When a futures contract expires the parties are required to honor and settle the contract, regardless of the asset’s market price at the time of contract expiration. This means that one side will inevitably make a profit while the other makes a loss—compared to the market price.

Settling a Futures Contract

When a futures contract expires there are two ways it can be settled:

  • Physical Delivery: The underlying asset is delivered to the buyer by the seller, e.g. they receive Bitcoin.
  • Cash-Settled: The buyer receives the cash value of the underly asset

Cash-Settled is by far the most common way a futures contract is settled, as most futures contracts are now made between speculators. This is true even if the futures contract is for a physical commodity like grain or fuel.

All too often, however, a futures trader will roll over their futures contract before the expiration date, meaning that they settle the difference on their existing contract, making either a profit or a loss, and immediately purchase the same position on a contract with a different expiry date. This allows the trader to maintain their position without having to fulfill the whole contract.

The Details of Cryptocurrency Futures Explained

Here we’ll dive into the nuances, and ensure that crypto futures trading is explained to you. First, we must note that many crypto futures, and the example we’re using here, are perpetual futures—meaning that they never expire.

To see how this works it’s best to dive into the details of perpetual futures contracts, so here’s an example from PrimeXBT:

PrimeXBT Bitcoin Futures Contract

Like spot markets, futures are bought and sold between traders, but can be leveraged—with each exchange offering differing levels of leverage. PrimeXBT allows for leverage of up to 200x—which means you can buy contracts worth up to 200x what you have in your account.

When a trader owns a futures contract the difference between the price on their contract and the spot price is their profit or loss—and the more leverage you use the more exaggerated these can be and this is why it can be very dangerous to trade with high leverage.

There are three important elements of a perpetual future contract that you need to know if you’re looking for how to make money trading crypto futures.

  • Maker/Taker Fee: Makers add liquidity to an order book by placing limit trades, Takers take liquidity from an order book by placing market trades. The Maker and Taker fees are the fees paid by these market participants and they vary by market.
  • Financing: Also known as the Funding Rate. This keeps the futures market in line with the spot price. The Funding Rate is taken in set intervals (8 hours on PrimeXBT), and depending, on which side of the spot price the futures market is, longs may pay shorts, or shorts may pay longs, therefore incentivizing traders to open up positions that balance the futures market around the spot price and also earn them a commission.
  • Next Financing: When the next financing rate will be taken from, or applied to, the traders’ margin accounts. Using these elements of the contract traders can calculate the cost of trading futures over a specific period, along with the cost of opening and closing trades. It is important to note that fees are calculated on the size of your position, not the size of your margin, and those who use high leverage need to ensure there is sufficient funding in their margin account to avoid liquidation.

The Best Place for Trading Crypto Futures

If you’re looking for where to trade crypto futures we recommend PrimeXBT, our top pick for crypto futures trading with markets for trading perpetual futures contracts for over 30 cryptocurrencies. PrimeXBT offers its users highly competitive futures trading fees, with Maker and Taker fees of 0.01% and 0.02% respectively, along with a funding rate of 0.01% for both longs and shorts, calculated in 8-hour intervals.

Alongside these crypto futures markets, users of PrimeXBT can also access spot markets that give them access to cryptocurrency trading, forex pairs, popular stock market indices, and several commodities—specifically energies and metals.

Note that PrimeXBT is not how to trade crypto futures in US because it does not serve users in the US, or US territories.

PrimeXBT Dashboard

A feature-rich dashboard greets those looking to trade futures on the PrimeXBT platform, displaying numerous market views to users, providing them with all the data they need to inform their futures trading activity in one place. Charts integrated from the popular TradingView platform allow traders to conduct analysis right next to where they place, monitor, and adjust their trades.

Alongside these futures markets and the previously mentioned spot markets, all with a competitive fee structure, for a variety of asset types, PrimeBTX also offers many other features, including:

  • Copy trading (through the third party Covesting)
  • Trading contests (requiring no deposit)
  • A mobile app (for Android and iOS)
  • An excellent referral program (with multiple layers)
  • An Academy (video content for beginner and experienced traders)
  • Weekly Market Reports (drawn from technical analysis)
  • 24/7 customer support (Through Telegram)

While PrimeXBT is a feature-rich platform offering a top-level user experience, it lacks in two areas though, being unregulated in the majority of jurisdictions around the world (offering little consumer protection) and, most notably, unlike its competitors, it doesn’t offer staking services.

Supported Assets 30+ Cryptos, forex, stock indices, metals, energy
Deposit Fees No
Deposit Methods Fiat, Crypto, 3rd Party
Futures Fees 0.01%/0.02% (Maker/Taker)
0.01%/0.01% Funding Rate (8 hours)
Withdrawal Fees Varies by Cryptocurrency
(Crypto withdrawals only)
Standout Features Crypto futures trading, copy trading, support for forex, commodities, and indices, TradingView integration, referral program
Mobile App Yes

Pros pros

  • Futures trading for 30+ cryptos with up to 200x leverage
  • Copy trading
  • Mobile app (can access futures trading in Android app)
  • TradingView integrations
  • Weekly Market Reports (based on technical analysis)
  • Excellent referral system
  • Market competitive fee structure for both futures and spot markets

Cons cons

  • No demo account
  • Crypto-only withdrawals (no fiat)
  • Low, $20,000, 24 hour withdrawal limit for unverified accounts
  • Unregulated broker
  • No staking services
  • Not available in 15 jurisdictions (including the US and Canada)

Trading Crypto Futures on PrimeXBT: A Step-by-Step Guide

For those wondering how to trade crypto futures, we offer up this simple-to-use guide to trade futures on the PrimeXBT exchange. Including screenshots of each step to help you through the process.

Step 1: Create a PrimeXBT Account

Those who don’t have one already, will need to create a PrimeXBT. Once new users fund their account with a qualifying deposit they will receive a welcome gift of $100 (qualifying deposit must be of $500 or more and made within 48 hours of registration and transferred to one of PrimeXBT’s global Markets trading accounts).

Account Creation on PrimeXBT

To create an account you’ll need to confirm your email address by receiving a unique code, create a strong password, and select which country you reside in.

Account Verification

Note that identity verification is optional for users of PrimeXBT. However, those who choose not to verify their identity are limited to a 24 hour withdrawal limit of $20,000, and withdrawals may be subject to manual review if they trigger suspicious alert activity. More can be learned on PrimeXBT’s withdrawal terms and conditions page.

Step 2: Deposit Funds

Trading futures requires providing the margin amount for the futures contract. Users of PrimeXBT can fund accounts through direct crypto deposits (BTC, ETH, USDT, USDC, and COV), direct cash deposits (using Perfect Money or AdvCash, note that this requires completing account verification), or by buying crypto through the connected 3rd party BAKSTA.

Deposit Choices PrimeXBT

Simple click the Deposit button on the homepage to get started, select your method of deposit, and follow the instructions to fund your account—ensuring along the way that you choose Wallet from the deposit location dropdown box (this is where we’ll fund the futures account from).

Step 3: Go to PrimeXBT’s Futures Markets

Once your account has registered your deposit (how long this takes will vary by currency and deposit method used) head over to the Futures Markets on PrimeXBT by going to the header, choosing Trade, selecting Crypto Futures, and then selecting your chosen futures market.

Note that only Bitcoin will be shown to you in the dropdown menu, but over 30 markets will be available to you in the trading menu.

Once on the Futures Markets page you’ll be prompted with a quick tutorial. Take this to familiarize yourself with the Futures platform.

PrimeXBT Crypto Futures Tutorial

Step 4: Choose the Futures Market

In the upper left corner of PrimeXBT’s futures dashboard is the futures market that you’re currently viewing charts for, along with a dropdown arrow. Clicking this arrow will allow you to select which futures market you want to trade on.

Futures Market Selection

Select a futures market that you want to trade on.

Step 5: Fund Your Futures Account

Futures accounts can only be funded by transferring existing funds from your wallet—if you don’t have the correct crypto for the market you want to trade on then you’ll have to either deposit it or trade some of your existing currency for it on the Global Markets.

In the upper right corner of the futures dashboard there’s a Fund button, colored green. Click this and enter how much cryptocurrency you want to move from your wallet to your futures accounts.

Step 6:Setting Trade Parameters

Each trader will be different, their options of the market will be different, as will the amount of assets they have to trade and their risk tolerance. The place order module is where each trader can customize their trade.

Highlighted Place Order Module

By clicking the small pencil net to the Margin Type you’ll enter the Margin Edit section and be able to adjust your margin parameters.

Once you’re happy with this you can Set these parameters, and return to the futures dashboard to complete your trade.

Once you’re happy with your trade you can click “Place Buy Order” to place it.

Step 7: Stop-Loss and Take-Profit Limits

On PrimeXBT you cannot set the Take-Profit and Stop-Loss limits until after you have placed your trade—and these limits are highly recommended to help you protect your position.

At the bottom of the futures dashboard is the Summary Module, and your completed trade will show up here as a Position—trades placed as a Limit or Stop order will show up under the Order tab in the Summary Module.

Position Summary PrimeXBT

Here you’ll find a column labeled TP/SL and you can click the pencil icon next to your open position and set your stop-loss and take profit limits—you can do the same under the Orders tab for your pending trades.

Step 8: Keep an Eye on Your Trade

Now that you’re in the market you’ll need to keep an eye on your futures positions and pending trades. This can be done in the Summary Module at the bottom of the page where you can also cancel pending orders and close out open positions with a simple click on the corresponding buttons at the end of the row.

If you’re wondering how to report crypto futures trading on taxes, you can read our article covering crypto tax rules around the world.

Conclusion

Now you’re caught up on how to trade crypto derivatives and know the best place to do so, you can start looking into, and using this financial instrument.

Our chosen platform for trading crypto futures is PrimeXBT, as it offers a large number of markets with high liquidity, mobile futures trading, and highly competitive fees.

FAQs

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Ben Beddow

Ben has been a freelance writer for almost a decade and started writing in the cryptocurrency space in 2019. Since then he has produced both technical and promotional content for layer 2 protocols (Milkomeda), blockchain development companies (dcSpark and Emurgo), and written content for his own ecosystem mapping website.