How to operate Kraken contract trading

Understanding how to leverage Kraken's contract trading platform, users gain access to futures and perpetual contracts, providing diverse opportunities for speculation on asset prices.

Nov 20, 2024 at 03:06 pm

How to Operate Kraken Contract Trading

Introduction

Kraken is a leading cryptocurrency exchange that offers a wide range of trading options, including spot trading, margin trading, and contract trading. Contract trading, also known as futures trading, allows traders to speculate on the future price of an asset without taking ownership of it. This can be a profitable way to trade, but it also comes with a higher level of risk.

In this article, we will provide a step-by-step guide on how to operate Kraken contract trading.

Step 1: Create a Kraken Account

The first step is to create a Kraken account. This is a simple process that can be completed in a few minutes. Once you have created an account, you will need to verify your identity. This is required by law and helps to protect your account from fraud.

Step 2: Fund Your Account

Once your account has been verified, you will need to fund it with cryptocurrency. Kraken accepts a wide range of cryptocurrencies, including Bitcoin, Ethereum, and Litecoin. You can deposit cryptocurrency into your account by sending it from another wallet or by purchasing it through Kraken's OTC desk.

Step 3: Choose a Contract

Kraken offers a variety of contract types, including futures contracts and perpetual contracts. Futures contracts expire on a specific date, while perpetual contracts do not. The type of contract you choose will depend on your trading strategy.

Step 4: Place an Order

Once you have chosen a contract, you can place an order. You will need to specify the size of your order, the price you want to buy or sell at, and the type of order you want to place. Kraken offers a variety of order types, including market orders, limit orders, and stop orders.

Step 5: Monitor Your Position

Once you have placed an order, you will need to monitor your position. You can do this by using Kraken's trading interface. The trading interface will show you the current price of the contract, the value of your position, and your profit or loss.

Step 6: Close Your Position

When you are ready to close your position, you can do so by placing an opposite order. For example, if you bought a contract, you would close your position by selling the same number of contracts.

Step 7: Withdraw Your Funds

Once you have closed your position, you can withdraw your funds from your Kraken account. You can do this by sending cryptocurrency to another wallet or by selling it through Kraken's OTC desk.

Conclusion

Contract trading can be a profitable way to trade, but it also comes with a higher level of risk. It is important to understand the risks involved before you start trading. If you are new to contract trading, it is a good idea to start by paper trading. This will allow you to practice trading without risking any real money.