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 positions with a smaller amount of capital. Margin is the collateral required to open and maintain a leveraged position.
* **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 retail traders use them for speculative purposes.

For a deeper dive into the basics, check out our guide: [[Understanding Crypto Futures Trading: A Beginner's Guide to DeFi Opportunities]].