How to play Bitstamp delivery contracts

Through Bitstamp's Delivery Contracts platform, traders can easily speculate on crypto asset price movements using perpetual or quarterly contracts, leveraging the platform's competitive fees, deep liquidity, and advanced features.

Nov 11, 2024 at 11:10 am

How to Play Bitstamp Delivery Contracts

Bitstamp Delivery Contracts, powered by TradingView, offer traders efficient and secure access to the crypto derivatives market. These contracts allow users to speculate on the price movements of underlying crypto assets without taking direct ownership.

How to Get Started

1. Create a Bitstamp Account: Sign up for a Bitstamp account, verify your identity, and fund your account with crypto or fiat currencies.
2. Navigate to the Delivery Contracts Platform: Go to "Trade" in the Bitstamp menu and select "Delivery Contracts."
3. Choose a Contract: Select the crypto asset you want to trade and the expiry date of the contract.
4. Set Order Parameters: Specify the contract quantity, leverage (the ratio of borrowed funds to trader-provided capital), and order type (market, limit, stop-limit).

Types of Delivery Contracts

• Perpetual Contracts: Contracts without a predetermined expiry date or settlement period, allowing traders to maintain positions indefinitely.
• Quarterly Contracts: Contracts that expire and settle on a quarterly basis, typically at the end of March, June, September, or December.

Key Features of Bitstamp Delivery Contracts

• Competitive Fees: Low trading and funding rates compared to other exchanges.
• Institutional-Grade Technology: Powered by TradingView's advanced charting and order execution platform, ensuring stability and reliability.
• Deep Liquidity: High trading volume and substantial open interest provide liquidity for smooth order execution.
• Flexible Leverage Options: Leverage up to 100x, enabling traders to amplify their potential profits while managing risk.
• User-Friendly Interface: Intuitive and customizable platform design for seamless trading experience.

Advanced Features

• Trailing Stop Orders: Automatically adjust the stop price as the market moves, protecting profits while limiting losses.
• Conditional Orders: Set conditional orders that trigger trades based on predefined criteria, allowing for automated trading.
• APIs and Algorithms: Integrate with third-party APIs and trading algorithms to automate strategies and enhance execution efficiency.

Example Trades

Scenario 1: Bullish on Bitcoin

• Buy a Bitcoin Perpetual Contract at a market price of $22,000.
• Set a leverage of 20x to amplify potential returns.
• Monitor the price and set trailing stop orders to secure profits and manage risk.

Scenario 2: Bearish on Ethereum

• Sell an Ethereum Quarterly Contract expiring in June at a market price of $1,500.
• Set a leverage of 25x to enhance downside exposure.
• Use conditional orders to close the position and realize profits when the price drops below a specific level.

Risk Management and Considerations

• Volatility and Margin Calls: Delivery Contracts involve significant volatility. Leverage can amplify profits but also increase losses, potentially leading to margin calls.
• Funding Rates: Perpetual Contracts are subject to funding rates that can add to or subtract from trading profits.
• Expirations and Settlements: Quarterly Contracts expire and settle on the specified dates. Traders need to be aware of these dates to manage their positions accordingly.
• Bankruptcy Events: In the event of exchange bankruptcy, delivery contract positions may be subject to closeout or liquidation procedures.

By following these steps and understanding the key features and risks, traders can effectively navigate Bitstamp Delivery Contracts and explore new trading opportunities in the crypto derivatives market.