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Biturai Trading Wiki
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Option Exercise vs. Closing Out Before Expiration
Understanding the difference between exercising an option and closing out the position before its expiration is fundamental for effective derivatives trading.
Crypto Options Expiration Mechanics
Crypto options contracts have a defined expiration date, marking the final moment an option can be exercised or assigned. Understanding these mechanics is essential for traders to manage positions and mitigate risks effectively.
Time-Weighted Average Price (TWAP) for Derivatives Settlement and Order Execution
The Time-Weighted Average Price (TWAP) is an algorithmic trading strategy designed to execute large orders by breaking them into smaller, consistent trades over a specified duration.
Cash Settlement vs. Physical Delivery in Crypto Futures
Futures contracts, including those for cryptocurrencies, conclude either through cash settlement or physical delivery. Understanding this distinction is fundamental for traders and investors navigating the derivatives market.
Spot-Futures Arbitrage: Exploiting the Basis
Spot-futures arbitrage is a market-neutral strategy designed to profit from temporary price differences between an asset's spot price and its futures contract price.
Roll Costs and Roll Yield in Futures Positions
Roll yield and roll costs describe the additional profit or loss generated when futures contracts are rolled over from a near-term expiration to a later one.
Understanding Basis Risk in Futures Hedging
Basis risk refers to the potential for the price difference between a spot asset and its corresponding futures contract to change unexpectedly.
Forward Contracts vs. Futures Contracts: OTC vs. Exchange-Traded
Forward and futures contracts are financial derivatives used to lock in asset prices for future transactions.
CFDs vs. Perpetual Futures in Crypto Trading
CFDs and Perpetual Futures are both powerful derivative instruments for speculating on asset prices without direct ownership.
Futures vs. Options: Choosing the Right Derivative for Your Market Outlook
Futures and options are derivatives that allow traders to speculate on future asset price movements or hedge risks. Their suitability largely depends on individual market outlook and risk tolerance.
Perpetual Futures vs. Traditional Futures: A Comparative Analysis
Perpetual futures are derivative contracts without an expiration date, primarily used in cryptocurrency markets for speculation and hedging.
Perpetual vs. Quarterly Futures: When to Use Which Contract
Perpetual futures offer continuous exposure without an expiry date, relying on a funding rate mechanism to track the spot price.
Coin-Margined Futures: Understanding Inverse Contract Mechanics
Coin-margined futures are cryptocurrency derivatives where the underlying crypto asset serves as both collateral and settlement currency.
USDT-Margined vs. Coin-Margined Futures: A Comparative Analysis
Cryptocurrency futures contracts offer traders opportunities to speculate on price movements with leverage.
Understanding Multipliers and Contract Value in Crypto Futures
Crypto futures contracts allow traders to speculate on cryptocurrency price movements without owning the underlying asset.
Pyramiding and Average Entry Price
Pyramiding is a trading strategy where investors gradually add to an existing profitable position as the market moves favorably.
Entry Price Versus Average Entry Price in Partial Executions
When trading derivatives or futures, understanding the difference between the initial entry price and the average entry price is fundamental.
Mark-to-Market: Daily Revaluation of Open Futures Positions
Mark-to-Market is the daily accounting process that adjusts the value of open futures positions to their current market price. This mechanism ensures that gains and losses are settled daily, impacting a trader's account balance and margin.
Calculating Profit and Loss for Long and Short Positions
Profit and Loss (PnL) quantifies the financial outcome of a trading position, distinguishing between unrealized gains/losses on open trades and realized gains/losses on closed ones.
Return on Equity in Futures Trading: Interpreting ROE
Return on Equity (ROE) in futures trading measures the profitability of an individual trade relative to the initial margin committed.