Trade
Crypto Futures with INR Margin

The funding rate is a periodic payment exchanged between long and short traders to ensure that the futures price stays aligned with the underlying asset price. In INR-based futures in crypto markets, funding rates can be influenced by fiat-crypto exchange rates and liquidity constraints. In crypto-to-crypto futures markets, the funding rate primarily reflects the broader volatility and demand-supply dynamics of the underlying asset.

High funding costs occur when there’s an imbalance between long and short positions, often due to market sentiment or excessive leverage. To reduce funding costs:

• Monitor funding rates before entering trades.
• Avoid holding positions during periods of high volatility.
• Use moderate leverage to minimize costs associated with larger positions.
• These strategies can help manage your expenses in crypto futures trading.

• Use a market order for instant execution at the current price, ideal for quick trades but prone to higher slippage.
• Use a limit order to set a specific entry price, ensuring more controlled execution, though it might take longer to execute.
• Choose based on your trading strategy and urgency.

A long position profits when the asset price rises, while a short position benefits from falling prices.
Decide based on:

• Market outlook (bullish or bearish sentiment).
• Technical analysis indicators like support, resistance, or moving averages.
• Broader trends in the best crypto futures markets.

Leverage allows you to control larger positions with a smaller capital investment.

• On CoinDCX, you can select leverage based on your risk tolerance, ranging up to 100x on BTC and ETH and 50x on 300+ pairs.
• Higher leverage increases potential gains but also amplifies risks, so adjust it cautiously.

You can modify leverage mid-trade on CoinDCX by adjusting your margin allocation. Additionally, you can:

• Set or modify Take Profit (TP) and Stop Loss (SL) levels.
• Partially close positions to lock in profits or reduce exposure.
• These features enhance flexibility and risk management in crypto futures trading.

Track your active positions under the “Positions” tab on CoinDCX. This section shows:

• Entry prices.
• Leverage used.
• Current profit or loss.
• It provides a real-time overview of your trades for better decision-making.

• Orders are instructions to buy or sell and exist before execution.
• Positions are active trades resulting from executed orders. On CoinDCX, manage orders in the “Orders” tab and monitor active trades in the “Positions” tab.

Set Take Profit (TP) or Stop Loss (SL) levels during trade setup or modify them later for active positions in the “Positions” tab. Adjusting TP/SL helps:

• Secure profits during favorable market moves.
• Minimize losses if trends reverse unexpectedly.

• Active PnL shows unrealized profits or losses on open trades.
• Past PnL reflects realized gains or losses from closed trades.
  Access both in the “Reports” or “Portfolio” section on CoinDCX to evaluate performance.

Crypto futures trading profits are taxed under ‘Profits & Gains of Business or Profession’ (PGBP), unlike spot trading, which incurs a flat 30% tax plus 1% TDS. This makes futures trading more tax-efficient, especially for frequent traders, compared to spot crypto trading in India.

While both involve trading contracts based on an underlying asset, futures in crypto differ in:

• 24/7 Trading: Unlike equity markets, crypto futures markets are always open.
• High Volatility: Crypto markets experience greater price swings, creating more opportunities and risks.

Leverage: Crypto futures trading often offer significantly higher leverage, up to 100x on CoinDCX, compared to equity markets.
These factors make futures in crypto ideal for traders seeking dynamic opportunities.

Liquidation occurs when your account balance falls below the required maintenance margin due to adverse market movements.

• On CoinDCX, the platform automatically closes your position to prevent further losses.
• Reduce the risk of liquidation by monitoring your margin and using stop-loss orders.

Yes, crypto futures are effective for hedging. Traders use futures to:

• Protect holdings: Offset losses in spot holdings by taking opposite positions in futures.
• Lock prices: Secure a fixed price for future transactions in volatile markets.
  Hedging strategies are ideal for managing risk in unpredictable crypto markets.

Unlike traditional futures, perpetual contracts:

• Have no expiry date, allowing positions to remain open indefinitely.
• Use funding rates to align futures prices with spot prices.
  Perpetual contracts provide flexibility, making them a popular choice in crypto trading.

Crypto futures trading carries several risks:

• High Volatility: Sudden market movements can result in large losses.
• Leverage Risks: Amplified exposure increases both potential gains and losses.
• Liquidation Risks: Insufficient margin can lead to automatic position closure.
  Mitigate risks by using moderate leverage, stop-loss orders, and proper risk management.

Funding rates are affected by:

• Market Sentiment: Imbalances between long and short positions.
• Volatility: Rapid price changes lead to higher rates.
• Demand for Leverage: Increased trading activity can impact funding costs.
  Monitoring these factors helps traders anticipate and manage funding costs effectively.

Transitioning involves adapting to key differences:

• Study Crypto Markets: Learn about high volatility and market dynamics.
• Understand Leverage: Crypto offers higher leverage than equities, requiring careful risk management.
• Start Small: Begin with low capital to familiarize yourself with crypto futures.
• Choose a Reliable Platform like CoinDCX: CoinDCX simplifies trading with user-friendly interfaces and INR-based futures trading options.

While the core principles are similar, crypto futures technical analysis emphasizes:

• Higher Timeframe Volatility: Crypto charts often exhibit sharper price movements.
• Unique Indicators: Crypto traders often use metrics like on-chain data alongside traditional indicators.
• Round-the-Clock Data: Unlike equity, crypto analysis requires accounting for continuous trading hours.

Yes, trading crypto futures doesn’t require owning the underlying asset. You trade contracts based on the asset’s price movement, making it accessible for new entrants from equity markets without the need for spot holdings.

Funding fees are periodic payments exchanged between long and short traders to keep futures prices aligned with the underlying asset’s spot price.

• When Longs Pay Shorts: Funding rates are positive, indicating high demand for longs.
• When Shorts Pay Longs: Funding rates are negative, indicating higher short demand.
  Traders must monitor funding fees as they can significantly impact the profitability of holding positions in crypto futures.

Funding fees depend on:

• Position Size: Larger positions incur higher fees.
• Funding Rate: Determined by the difference between futures and spot prices.
• Frequency: Funding payments occur at fixed intervals, usually every 8 hours.
  Traders can view upcoming funding rates on platforms like CoinDCX to plan their trades effectively.

Funding fees can’t be entirely avoided but can be minimized by:

• Timing Trades: Avoid high funding rate periods.
• Shorter Holding Periods: Reduce exposure to funding cycles.
• Switching Bias: Consider taking the opposite position if funding is consistently high.

• Maker Fees: Applied when you add liquidity by placing limit orders that don’t execute immediately. Maker fees are usually lower because they help maintain market depth.
• Taker Fees: Charged when you remove liquidity by placing market orders that execute instantly. Taker fees are generally higher due to their immediate impact on liquidity.
  Platforms like CoinDCX reward traders who provide liquidity with lower fees.

• Fee Structure:
  • Crypto uses a maker-taker model where fees vary based on liquidity contribution.
  • Stock brokers charge flat commissions or percentage-based fees, unrelated to liquidity.
• Flexibility:
  • Crypto platforms offer dynamic fee structures, incentivizing makers with reduced fees.
  • Stock brokerages often have fixed rates regardless of trade type.
• Transparency:
  • Crypto fees are clearly displayed per trade, while brokerage fees may include hidden charges like exchange fees or taxes.

• Use limit orders to benefit from lower maker fees.
• Trade on high-liquidity platforms like CoinDCX to minimize slippage.
• Understand the fee tiers—platforms may reduce fees for high-volume traders or VIP users.