Crypto Futures Spread Trading: A Guide for Institutional Traders using Paradigm and BitSpreader
Crypto futures are contracts that allow traders to buy or sell an underlying cryptocurrency at a predetermined price and date in the future. Crypto futures can be used for hedging, speculation, arbitrage, or portfolio diversification. However, trading crypto futures also involves risks, such as volatility, leverage, liquidity, and counterparty risk. In this article we review how to Spread Trade Crypto Futures, with a look at 2 platforms that facilitate this: Paradigm and BitSpreader.
Crypto futures spread trading involves taking long and short positions simultaneously to profit from price differences, reducing risk compared to outright trading. Paradigm offers multi-asset, multi-protocol liquidity for crypto derivatives, block trading, and on-chain settlement. BitSpreader specializes in low-latency spread trading across exchanges with auto-spreading and cloud-based access. Both platforms provide tools for institutional traders, but spread trading requires complex analysis, careful execution, and risk management. Key strategies include calendar spreads and butterfly spreads, with market conditions like contango and backwardation influencing profitability.
Crypto Future’s Spread Trading: A Guide for Institutional Traders using Paradigm and BitSpreader
Crypto futures are contracts that allow traders to buy or sell an underlying cryptocurrency at a predetermined price and date in the future. Crypto futures can be used for hedging, speculation, arbitrage, or portfolio diversification. However, trading crypto futures also involves risks, such as volatility, leverage, liquidity, and counterparty risk.
One way to mitigate some of these risks and enhance the profitability of crypto futures trading is to use spread trading strategies. Spread trading is a type of market-neutral strategy that involves simultaneously opening two positions: one long and one short. The aim is to profit from the change in the price difference between the two positions, rather than the direction of the market.
Spread trading can be applied to crypto futures in two ways: cross-asset spreads and calendar spreads. Cross-asset spreads involve trading futures on different cryptocurrencies or their perpetual futures, such as ETH/BTC or BTC/USDT. Calendar spreads invol