Editing Crypto Futures Explained: Essential Insights for Institutional Newcomers (section)

== What is Crypto Futures Trading and How Does It Work? ==
Crypto futures are financial contracts that obligate the buyer to purchase, and the seller to sell, a specific cryptocurrency at a predetermined price and date in the future. Unlike [[spot trading]], where assets are bought and sold immediately, futures trading allows traders to speculate on price movements without owning the underlying asset.

Key features of crypto futures trading include:
* **Leverage and Margin**: Traders can amplify their positions using leverage, which allows them to control larger amounts of cryptocurrency with a smaller initial investment (margin).
* **Expiration Dates**: Futures contracts have specific expiration dates, after which the contract is settled either in cash or by delivering the underlying asset.
* **Hedging and Speculation**: Institutional investors often use futures to hedge against price volatility, while traders use them to profit from market movements.