Cryptocurrency Q&A
Why buy futures instead of ETF?
Why buy futures instead of ETF?
Pietro
Fri May 17 2024
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7 answers
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I've been hearing a lot about investing in futures and ETFs, but I'm still not quite sure which one is better for my portfolio. Could you explain why someone might choose to buy futures instead of ETFs? Is it about the potential for higher returns? Or is it the flexibility in trading that futures offer? Maybe it's the hedging capabilities that futures provide? I'm really curious to know what makes futures a viable alternative to ETFs in the investment world.
7 answers
Riccardo
Sun May 19 2024
The margin for futures trading is typically much lower, with performance bond margins often less than 5% of the notional amount. This allows investors to control larger positions with relatively smaller amounts of capital.
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ZenFlow
Sun May 19 2024
BTCC, a UK-based cryptocurrency exchange, offers a diverse range of services to its customers. Among these is spot trading, which allows users to buy and sell cryptocurrencies at current market prices.
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CryptoLord
Sun May 19 2024
ETFs, or Exchange Traded Funds, carry annual management fees as part of their operational expenses. These fees are levied by the fund managers to cover various administrative and operational costs associated with managing the ETF.
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EclipseChaser
Sun May 19 2024
The margin requirements for stocks and ETFs under Regulation T typically stand at 50% of the value of the security. This means that investors need to deposit half of the total value of the stock or ETF as collateral when borrowing funds to purchase them.
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MountFujiView
Sun May 19 2024
Additionally, BTCC provides futures trading services, enabling investors to speculate on the future prices of cryptocurrencies with leverage. This offers an attractive option for those seeking higher returns with increased risk.
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