When you feel you are ready to trade cryptocurrency futures contracts and understand the nature of the product and physical settlement (ono manipulation risk in terms of settlement), CoinFLEX (Coin Futures and Lending Exchange) will be ready to take your deposits. CoinFLEX is a trading platform where contracts referencing cryptocurrencies such as Bitcoin are traded similar to commodities, and this means that traders take physical delivery of their futures contracts. Unlike other trading platforms that only offer cash value settlements of futures contracts, CoinFLEX is able to provide actual delivery of underlying assets.
Physical delivery of digital currency futures means that traders are not subject to complicated formulas that determine the cash value of their instruments or positions. This also means that investors are not exposed to price manipulation, an uncomfortable aspect of trading at other exchange platforms. CoinFLEX fees are highly transparent: maximum fees of just 0.03% per contract transaction, down to as long as 0 on the market side and 0.01% on the taker side. and the leverage can run as high as 20X for Bitcoin or Tether.
Getting Started With CoinFLEX
The first step is to access www.coinflex.com and click on the Register tab located near the top right corner of the screen, next to Log In. The credentials are your standard email and password combination, but you should strive to create a password that is strong and unique to this account; a combination of uppercase and lower case consonants combined with non-sequential numbers and symbols is highly recommended.
As of December 2019, CoinFLEX observes some jurisdictional restrictions to keep in mind. Citizens and residents of the United States are prohibited from trading, and the same goes for the following countries:
– North Korea
In addition to the above, other nationalities are prohibited; check the CoinFLEX Terms of Service for more information.
You will have to set up a two-factor authentication (2FA) method to access your CoinFLEX account. Smartphones are the most common 2FA devices, but you can also use a YubiKey, a tablet, a laptop, or even a second PC. The 2FA account access method is for your safety. You will need to enter a 2FA token when accessing your CoinFLEX account or to change your password.
To fund your account, you will need to transfer Bitcoin, Tether or USD Coin, and you can get started with as little as 10 USDT, 10 USDC or 0.001 Bitcoin. You will notice that Bitcoin is referred to as XBT instead of the usual BTC, and this is because CoinFLEX adheres to international commodity trading standards. You can request withdrawals of funds via XBT, USDT, and USDC. There are no fees involved when funding your account.
Trading Bitcoin Futures on CoinFLEX
Let’s say you wish to go long on a January Bitcoin contract; in this case, and if you need leverage to take the position, you will need to request margin in Tether to buy XBT. You start with the Bitcoin collateral posted in your account and request USDT leverage if you wish to enhance the contract. You will have a leveraged contract named XBTJAN20, which you can buy or sell.
Please note that sell positions are leveraged with XBT. As of late 2019, calendar spread trading is a feature that CoinFLEX is still working on implementing. Contracts are settled on the last Friday of each month, but you do not have to hold them until expiration. Rolling a contract into the next month is not automatic, you have to close the existing position prior to the expiration date and copy it to the next month.
As with all other operations that involve the trading of futures contracts, margin calls can be expected if the contract falls out of leverage compliance. This process is known as auto-liquidation, and it is executed by means of algorithms. Unlike other futures trading platforms, CoinFLEX will not liquidate the entire position, only enough to bring the account back to margin compliance ratios.