Futures Contract Details

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Chapter 2.9: Difference between Futures and Options

Futures and options are tools used by investors when trading in the stock market. As financial contracts between the buyer and the seller of an asset, they offer the potential to earn huge profits. However, there are some key differences between futures and options. Click here if you want to know how to buy and sell Futures Contracts.

Understanding what are futures and options, particularly the points of difference between the two, will help you to use these trading tools in the best possible way. However, if you’re looking for difference between Covered and Naked options contracts, click here.

HOW FUTURES AND OPTIONS CONTRACTS DIFFER

Obligation:

A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Here, the buyer is obliged to buy the asset on the specified future date. You can read up the basics of futures contract here.

An options contract gives the buyer the right to buy the asset at a fixed price. However, there is no obligation on the part of the buyer to go through with the purchase. Nevertheless, should the buyer choose to buy the asset, the seller is obliged to sell it. If you want to know more about an options contract, you can read about what is Options trading,

Risk:

The futures contract holder is bound to buy on the future date even if the security moves against them. Suppose the market value of the asset falls below the price specified in the contract. The buyer will still have to buy it at the price agreed upon earlier and incur losses.

The buyer in an options contract has an advantage here. If the asset value falls below the agreed-upon price, the buyer can opt out of buying it. This limits the loss incurred by the buyer.

In other words, a futures contract could bring unlimited profit or loss. Meanwhile, an options contract can bring unlimited profit, but it reduces the potential loss.

Did you know that though derivatives market is used for hedging, currency derivative market takes the centre stage for hedging? You can read about it here.

Advance payment:

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There is no upfront cost when entering into a futures contract. But the buyer is bound to pay the agreed-upon price for the asset eventually.

The buyer in an options contract has to pay a premium. The payment of this premium grants the options buyer the privilege to not buy the asset on a future date if it becomes less attractive. Should the options contract holder choose not to buy the asset, the premium paid is the amount he stands to lose.

In both cases, you may have to pay certain commissions.

Contract execution:

A futures contract is executed on the date agreed upon in the contract. On this date, the buyer purchases the underlying asset.

Meanwhile, the buyer in an options contract can execute the contract anytime before the date of expiry. So, you are free to buy the asset whenever you feel the conditions are right.

FUTURES OPTIONS – POINTS TO REMEMBER

1. Contract details:

At the time of drawing up a futures or options contract, four key details will be mentioned:

  • The asset that is up for trade
  • The quantity of the asset that is available for buying or selling
  • The price at which it will be traded
  • The date on which (futures contract) or by which (options contract) it must be traded

The futures contract will also mention the method of settlement.

2. Trade venue:

The trade in futures takes place on the stock exchange. The options trade takes place both on and off the exchanges.

Futures and options contracts can cover stocks, bonds, commodities, and even currencies.

4. Requirements:

You would need a margin account to trade in futures and options.

What next?

By now, you have studied all the important parts of the derivatives market. You know what are derivatives contracts, the different types of derivatives contracts, futures and options, call and put contracts, and how to trade these. Congrats! It is time to wrap up this section and move on to the next—mutual funds.

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Futures Contract Details

+352 42 80 42 80

Margins, exchange fees & contract details

Symbol Trading Hours Fees Margin (in €) Minimum change Details
Exchange CQG Local CET Exchange Intraday Overnight Tick Value Expires
DAX FDAX DD 2.15 – 22.00 0,80 € 12000 36000 0.5 12,5 €
Mini-DAX FDXM FDXM 2.15 – 22.00 0,25 € 2500 7250 1 5 €
EuroStoxx FESX DSX 2.15 – 22.00 0,35 € 1400 4300 1 10 €
VSTOXX FVS FVS 8.00 – 22.00 0,40 € 800 2500 0,05 5 €
Bund FGBL DB 2.15 – 22.00 0,22 € 1000 3100 0,01 10 €
Bobl FGBM DL 2.15 – 22.00 0,22 € 400 1200 0,01 10 €
Schatz FGBS DG 2.15 – 22.00 0,22 € 100 300 0,005 5 €
Euro-Oat FOAT FOAT 8.00 – 19.00 0,22 € 700 2400 0,01 10 €
BTP FBTP FBTP 8.00 – 19.00 0,22 € 1600 4000 0,01 10 €
SMI FSMI SW 7.50 – 22.00 0,50 CHF 3000 11000 1 10 CHF
DJESTBANK FESB FESB 8.00 – 22.00 0,30 € 200 600 0,1 5 €

Futures exchanges modify these parameters on occasion. Although this table is updated as often as possible, information may be outdated. Margins are expressed in Euro (€). The indicated margins can only be considered informative, as they are subject to fluctuations that may occur at any time and without prior notice.

The futures exchanges charge traders for real-time market data. WH SelfInvest must collect these charges and transfer them to the relevant exchanges.

Euronext € 45
Eurex € 20
CME – fixed fee € 15
plus, per individual market:
CME € 5
CBOT € 5
Nymex € 5
Comex € 5
or all 4 markets together € 15 (-25%)
Liffe € 117
ICE US € 117
ICE Europe € 135

Clients can choose the market(s) they want. No market is obligatory. The above are fees for non-professional traders. Professional traders pay higher market data fees. Professional fees are available upon request.

Tezos Futures & Perpetual Contracts Guide

Tezos Contracts Listed on Delta Exchange

Symbol Description Price Max Leverage Settlement Currency Action
XTZ Index Details
XTZBTC Tezos Perpetual Swap 20x BTC See Market

Complete details of the futures and perpetual contracts on XTZ that are listed on Delta Exchange are available below.

About Tezos

Tezos is a blockchain with on-chain governance. This means that the Tezos Protocol can evolve through self-amendment. Stakeholders can vote on amendments to the protocol and thus all proposals are accepted or rejected depending up on ability to reach social consensus. Tezos offers smart contracts and can be used to build decentralised applications.

Tezos Token (XTZ) is the native token of the Tezos blockchain. Proof of stake (Pos) mechanism is used reach consensus on the state of the blockchain. Any XTZ stakeholder can participate in the consensus process in Tezos and be rewarded by the protocol itself for contributing to the security and stability of the network.

You can margin trade XTZ on Delta Exchange using our derivative (i.e. futures and perpetual) contracts. This means that you can go long or short XTZ with leverage.

Tezos Contracts Listed on Delta Exchange

Tezos Perpetual

Perpetual contracts on XTZ are intended to provide returns of the underlying spot market in XTZ with the added advantage of leverage. Perpetual contracts do not have an expiry date. You can learn more about perpetual contracts here.

Quotation Details

XTZ Perpetual contracts are quoted in BTC. All margin, Profit/ loss and settlement calculations are denominated in BTC.

Margin and Leverage

XTZ Perpetual contracts are margined in BTC. This means you need to have BTC to trade these contracts. The maximum allowed leverage for XTZ Perpetual contracts is 20x.

Underlying Index

The underlying index for XTZ Perpetual contracts is .DEXTZXBT. It comprises of equal weighted average price of XTZ/BTC price from bitfinex and binance.

Funding

Funding is a series of continuous payments that are exchanged between longs and shorts in a perpetual contract to keep the price of the contract tethered to the underlying index.

At any given time, funding rate is equal to the difference of the mark price and the underlying index price. Funding is considered to be an 8-hourly interest rate and is computed and exchange every minute. When funding rate is positive, longs pay shorts. When funding rate is negative, shorts pay longs.

Settlement

This contract is perpetual and does not settle.

  • Taker fees = 0.25%
  • Maker fees = -0.05%

Trading Tezos

Why Should You Trade Tezos Futures & Perpetual

You can directly buy or sell Tezos token. This is called spot trading of XTZ. If you buy low and sell high, you will make profit. However, this trade only works when XTZ price goes up. Further, leverage trading is not possible in spot trading.

XTZ margin trading through derivatives addresses these shortcomings. The XTZ futures and perpetual contracts enable you to go benefit from both up and down move in XTZ. Further, these derivative contracts have built-in leverage, enabling you to trade big with small capital.

How to Start Trading on Delta Exchange

Starting trading on Delta Exchange is a breeze. Here’s how you can make your first XTZ trade on Delta Exchange:

    Register: This takes

Delta exchanges offers trading in cryptocurrency futures. These futures offer: (a) up to 100x leverage and (b) ability to go both long or short. Crypto futures not only have the same features as margin trading, but also higher liquidity and lower trading fees.

Delta Exchange is a derivatives exchange. You can trade futures on cryptocurrencies, but not cryptocurrencies directly. The complete list of futures listed on delta is available here.

For any query, feedback, suggestion or business proposals, please write to us at: [email protected]

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