Theta Futures Explained - What are THETA Futures and How They Work

A Theta futures contract is an agreement to buy or sell a specific quantity of Theta (THETA) at a predetermined price at a specified time in the future.

Theta futures markets provides two very important features to cryptocurrency traders:

  1. Buying THETA futures allow traders to control more Theta tokens through the use of leverage (10x to 50x not uncommon)
  2. Selling THETA futures allow traders to profit from a fall in THETA price

Buying THETA Futures (or Long THETA Futures)

You buy THETA futures if you wish to profit from a rise in the price of Theta in the near future. This trading strategy is also known as opening a long THETA futures position

At 10x leverage, buying a $100 THETA futures contract will let you ‘own’ $1,000 worth of Theta.

However, do note that should the price of THETA fall more than 10%, you will stand to lose your entire $1,000 investment as your position gets liquidated.

A Simplified Example

Let’s suppose THETA is trading at 1 USDT per token. A THETA futures trader is bullish and decides to open a long THETA futures position at that price by buying 10,000 THETA futures contract at 10x leverage.

With each contract having a contract size of 1 THETA, the initial margin required to open this position is: 10,000 x $1 / 10 = $1,000

Depending on how the price of THETA performs, the trader can either make a lot of money or lose his entire investment.

Bullish Scenario: Price of THETA Rallies to $1.1

If the price of THETA goes up to $1.1, the trader’s position will be in the money and has a profit of $1,000. He can then close the futures position to take profit with a ROI of 100%, even though the THETA price only moved 10%. This remarkable performance is possible due to the 10x leverage used.

Bearish Scenario: Price of THETA crashes to $0.9 or lower

In the event that the Theta price goes down to $0.9 or lower, the trader’s position will be liquidated and he loses his entire investment of $1,000.

Note that even if the price of THETA dived down to $0.8 or even lower, the maximum loss sustained by the trader is still capped at $1,000.


Note: The above examples are simplified to aid understanding of the basic concepts behind THETA futures trading. Actual profits and losses may differ materially due to a variety of trading fees involved. We will cover those fees and more in our upcoming Theta Futures trading guide.


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Theta Futures Explained - What are THETA Futures and How They Work

A Theta futures contract is an agreement to buy or sell a specific quantity of Theta (THETA) at a predetermined price at a specified time in the future.

Theta futures markets provides two very important features to cryptocurrency traders:

  1. Buying THETA futures allow traders to control more Theta tokens through the use of leverage (10x to 50x not uncommon)
  2. Selling THETA futures allow traders to profit from a fall in THETA price

Buying THETA Futures (or Long THETA Futures)

You buy THETA futures if you wish to profit from a rise in the price of Theta in the near future. This trading strategy is also known as opening a long THETA futures position

At 10x leverage, buying a $100 THETA futures contract will let you ‘own’ $1,000 worth of Theta.

However, do note that should the price of THETA fall more than 10%, you will stand to lose your entire $1,000 investment as your position gets liquidated.

A Simplified Example

Let’s suppose THETA is trading at 1 USDT per token. A THETA futures trader is bullish and decides to open a long THETA futures position at that price by buying 10,000 THETA futures contract at 10x leverage.

With each contract having a contract size of 1 THETA, the initial margin required to open this position is: 10,000 x $1 / 10 = $1,000

Depending on how the price of THETA performs, the trader can either make a lot of money or lose his entire investment.

Bullish Scenario: Price of THETA Rallies to $1.1

If the price of THETA goes up to $1.1, the trader’s position will be in the money and has a profit of $1,000. He can then close the futures position to take profit with a ROI of 100%, even though the THETA price only moved 10%. This remarkable performance is possible due to the 10x leverage used.

Bearish Scenario: Price of THETA crashes to $0.9 or lower

In the event that the Theta price goes down to $0.9 or lower, the trader’s position will be liquidated and he loses his entire investment of $1,000.

Note that even if the price of THETA dived down to $0.8 or even lower, the maximum loss sustained by the trader is still capped at $1,000.


Note: The above examples are simplified to aid understanding of the basic concepts behind THETA futures trading. Actual profits and losses may differ materially due to a variety of trading fees involved. We will cover those fees and more in our upcoming Theta Futures trading guide.


Theta Futures & Derivatives Guides
THETA Futures
Trade THETA Futures Contracts with up to 50x Leverage on Binance

Theta futures contracts is available for trading on the Binance Futures platform with up to 50x leverage. (read more)

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Theta Futures Trading Guide - How to Buy & Sell THETA Futures on Binance

Step-by-step guide on how to buy and sell Theta futures contracts using the Binance futures exchange platform. (read more)

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Short Theta Futures - Selling THETA Futures to Short with Leverage

Selling IOST Futures contracts allow the trader to enter a short IOST position with as much as 10x to 50x leverage or more, depending on the exchange used. (read more)

Promotions
Use Binance Futures Referral Code 'guru10' & Get 10% Discount on Futures Trading Fees

Learn how to activate your Binance Futures Trading Account and get additional 10% discount off trading fees using our exclusive Binance Futures referral code. (read more)

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