10 Best Crypto Contract Trading Platforms For 2025

Crypto contract trading platforms are centralized or decentralized crypto exchanges that facilitate the trading of crypto contracts. They enable traders to speculate on the price movements of a crypto asset without the need to buy or own it.

In this article, we’ll provide a comprehensive review of the best contract trading platforms for 2025, highlighting their key features, advantages, and pitfalls. We’ll also walk you through the concept of contract trading, types of crypto contracts, and how to choose the right platform. 

Best Contract Trading Platforms in 2025

1. Binance: Largest digital asset exchange
2. BTCC: Best crypto contract trading platform in the US
3. Bybit: Best no-KYC crypto trading platform.
4. BYDFi: Best FinCen-regulated contract trading platform.
5. Coinbase: Best trading platform for beginners
6. Gemini: Best SOC-certified exchange.
7. Kraken: Top exchange for professional futures trading
8. MEXC: Best trading platform with the lowest fees.
9. Phemex: Best platform for perpetual futures trading
10. PrimeXBT: Best exchange for trading in multiple financial markets.

Best Contract Trading Platforms Comparison

Contract trading platform	Derivative contracts offered	Derivatives Trading fees for standard users
Binance	USDS-M futures, Coin-M futures, and USDT options.	Futures – 0.02% maker and 0.05% taker. Options – 0.03% maker and 0.03% taker.
BTCC	USDT-M and Coin-M perpetual futures.	0.025% maker and 0.045% taker.
Bybit	USDT and USDC-settled perpetuals, regular futures with a set expiry date, and coin-settled inverse contracts.	Perpetuals and futures – 0.02% maker and 0.055% taker. Options – 0.02% maker and 0.03% taker.
BYDFi	USDT-M and Coin-M perpetuals and leveraged tokens.	Perpetuals – 0.02% maker and 0.06% taker. Leveraged tokens – 0.2% fees, deducted in USDT.
Coinbase	Futures and perpetual (no-expiry) contracts.	0.4% (40bps) maker and 0.6% (60bps) taker.
Gemini	Cross-collateral custody-free perpetuals.	0.02% maker and 0.07% taker.
Kraken	USD linear perpetuals, inverse Coin-M perpetuals, inverse Coin-M fixed maturity futures, Multi-collateral perpetuals, and Chicago Mercantile Exchange (CME) futures (in the US only)	0.02% maker and 0.05% taker.
MEXC	USDT-M, USDC-M, and Coin-M perpetuals.	0.01% maker and 0.04% taker
Phemex	USDS-M and Coin-M perpetuals.	0.01% maker and 0.06% taker.
PrimeXBT	Fixed maturity futures and CFD trading across multiple markets, including crypto.	Futures – 0.01% maker and 0.045 taker. Crypto CFDs – 0.05% fees

10 Best Contract Trading Platforms – Detailed Review

1. Binance

Binance is the best crypto contract trading platform, offering futures contracts in over 535 trading pairs and up to 125x leverage on specific pairs. The exchange primarily offers three types of crypto derivatives: USDS-margined(M) futures, Coin-margined(M) futures, and options. 

While USDS-(M) futures are settled in stablecoins, especially the United States Dollar Tether (USDT) and United States Dollar Coin (USDC), Coin-M futures are settled in cryptocurrencies. If you want to invest in perpetual contracts, you can opt for USDC, USDT, or Coin-M perpetuals. 

Binance also offers crypto options priced and settled in stablecoins, particularly USDT. They enable users to enter and exit positions securely even during periods of high market volatility.  Regardless of bull or bear market conditions, the nominal value of the underlying collateral is unlikely to fall drastically. 

For institutional investors, Binance offers over-the-counter (OTC) trading, including options request for quote (RFQ) for block option trading.

With Binance, you can also automate trades using pre-built trading bots like futures grid or deploy your bots to replicate profitable trading strategies. Additionally, the Binance trading platform supports leveraged and spot trading. 

New traders can utilize Binance’s copy trading feature to emulate the trading strategies of experts. They can also create a demo account to practice trading strategies in a simulated environment before executing real trades.

As far as trading fees are concerned, Binance charges a 0.02% maker fee and 0.05% taker fees for regular futures traders. If you are a BNB ( Binance Coin) holder, you get a 10% discount, and your maker and taker fees decrease to 0.018% and 0.045%, respectively. 

Pros

• Robust security features like cold wallets, two-factor authentication (2FA), end-to-end encryption, proof of reserves (PoR), anti-phishing code, and Secured Asset Fund for Users (SAFU)
• Offers learn and earn courses via Binance Academy. 
• Supports 500+ cryptocurrencies and 1300+ trading pairs.
• Enables users to earn passive income on 300+ assets and yield-maximizing products like dual investments and smart arbitrage.
• Publishes resourceful blogs and institutional-grade market research reports. 
• User-friendly mobile app.

Cons

• No phone or e-mail support is offered to traders.
• The trading interface is not beginner-friendly.
• Unavailable in some countries, including the US, the United Kingdom (UK), Singapore, the Netherlands, Canada, Japan, and Nigeria.
• Limited fiat off-ramp methods are supported in certain locations.

2. BTCC

BTCC is one of the top crypto futures trading platforms, especially for traders based in the United States of America (USA). With crypto licenses in the US, Europe, and Canada, BTCC helps users avail of transparent, seamless, and inclusive trading services. The platform supports 300+ futures pairs and 200+ spot pairs. It is particularly suitable for users looking to trade USDT-M perpetual futures. 

A standout feature of BTCC is that it allows users to trade without urging them to complete know-your-customer (KYC) procedures. It offers up to 500x leverage for contract trading, an ultra-fast order matching engine, narrow bid-ask spreads, customizable margin settings (isolated and cross margin), and multi-contract support.

As the exchange has deep liquidity, orders get filled faster with minimal slippage, even when the market is volatile.

Additionally, BTCC’s trading costs are lower than those of Coinbase and Kraken, especially for high-volume traders. For futures trading, the exchange collects a 0.025% maker and 0.045% taker fees. When you move up the VIP tiers, you get higher fee discounts. For spot trading, the maker and taker fees remain fixed at 0.2% and 0.3%, respectively, across all tiers. 

Lastly, the exchange has cutting-edge security features such as multi-signature cold wallets, 1:1 storage of user assets, KYC verification for deposits and withdrawals, 2FA, penetration testing, and encrypted data. It also offers insurance fund protection to cover losses incurred by users due to forced liquidations.

Pros

• Provides up to $100,000 virtual funds for demo trading. 
• A copy trading platform with over 600,000 registered copy traders.
• Zero fees for crypto deposits.
• Provides risk management tools such as stop-loss and take-profit orders to minimize liquidation risks.
• Enables crypto trading with low balances or minimum deposits.
• Desktop and mobile apps with user-friendly interfaces.
• Offers custom lot sizes, enabling users to adjust position sizes for enhanced risk management.

Cons

• Doesn’t support crypto options trading and decentralized finance (DeFi) projects.
• No passive income-earning options like staking or yield farming.
• Not a beginner-friendly platform.

3. Bybit

Touted as a cryptoark or bridge between the virtual and real worlds, Bybit has emerged as a top-ranked contract trading platform and a trusted gateway to the Web3 ecosystem. For derivative traders, Bybit offers futures contracts settled in USDC, USDT, and cryptocurrencies. Among the stablecoin-settled and collateralized crypto contracts, you can opt for perpetual contracts, regular futures with expiry dates, or inverse (coin-settled) futures. 

If you’re looking to trade stablecoin-settled options at nominal fees, Bybit is worth exploring. It offers a unified trading account (UTA) that helps you leverage 70+ assets as collateral to boost capital efficiency.  The UTA provides users with more trading power and flexibility by combining spot, perpetuals, futures, and options with cross margins. It also offers hedging solutions for USDC and USDT contracts.

In addition, Bybit is known for its low latency rates of less than 10ms, especially in options trading. Its advanced tools, like TradeGPT (AI-powered token analysis and insights), leaderboard, and TradeFi, help maximize returns. TradeFi offers 100+ trading pairs and financial instruments, including stock indices, forex, commodities, and crypto, up to 500x leverage, top-notch liquidity, and tight spreads. 

If you’ve just started trading in derivatives, you can utilize Bybit’s position builder to simulate profits and losses (PnL) for various perpetual, futures, and options pairs before placing real orders. 

Moreover, you can increase your profits through copy trading by replicating the profitable strategies of professional traders. You can also use automated bots like Futures Grid, Futures Martingale, and Futures combo to auto-rebalance your portfolio and make gains.

Bybit’s trading charges are also nominal: 0.02% maker and 0.055% taker fees for perpetuals and futures, and 0.02% maker and 0.03% taker charges for options. 

Lastly, Bybit offers robust risk management tools like adjustable collaterals, dual-price liquidation systems, and super-fast execution of trigger or trailing stop loss orders. 

Pros

• Facilitates direct crypto purchases in the spot market with up to 10x leverage.
• Offers structured products like dual asset and smart leverage of up to 200x.
• Provides Airdrop livestreams, the latest news, and Bybit Learn with a repository of explainer articles to enhance your crypto knowledge.
• TradingView integration with advanced charting tools.
• Supports 640+ futures pairs with 99.99% uptime.
• Processes up to 100,000 transactions per second with zero slippage. 
• Privacy-focused security measures such as cold wallets, triple-layer asset protection, bug bounty programs, and live risk monitoring.

Cons

• Not accessible in the US, the UK, and Canada.
• KYC verification is mandatory for unlimited deposits and withdrawals.

4. BYDFi

BYDFi is another notable crypto contract trading platform for US traders. Regulated as a Money Service Business by FinCen, BYDFi enjoys immense popularity among the crypto community. It is also one of the few exchanges that allows trading without KYC verification, making it a fantastic choice for both novice and experienced traders who are seeking speed, agility, and security.

While you can trade USDT-M perpetuals and Coin-M perpetuals on BYDFi, you can also explore its BTC and ETH-based leveraged tokens to amplify your trading power and resultant gains. These tokens boost exposure to the price movements of the underlying crypto, without requiring users to manage the risks of liquidation. 

BYDFi is a high-performance contract trading platform with low trading fees of 0.02% maker and 0.06% taker and economical funding rates. Additionally, BYDFi offers potent security measures such as 2FA, PoR audited by third parties, multi-signature approvals, insurance coverage, and hot and cold wallet separation.

Its trading interface is responsive, 100% customizable, and comprises charting options, margin adjustment functionality, and order book depth. For trade automation, you can create bots or use the pre-coded Futures Grid for trading futures. Conversely, spot traders can utilize trading bots such as Spot Grid, Spot Investment, and Spot Martingale, offering excellent 90-day annual percentage yield (APY).

Pros

• Offers demo trading.
• Enables contract trading with a leverage of up to 200x on derivatives, including 400+ perpetuals.
• Supports multiple order types like take profit, stop loss, market, limit, and one cancels the other (OCO).
• Facilitates zero-fee fiat deposits and crypto purchases with credit cards.
• 24/7 multi-lingual customer support via e-mail, live chat, and Telegram.
• Excellent affiliate program, offering a revenue share of up to 70% to its partners.

Cons

• Doesn’t support fiat withdrawals.
• There are fewer copy traders available compared to other exchanges.

5. Coinbase

Coinbase is a reputable cryptocurrency exchange that enables contract trading in crypto perpetuals and futures. Founded in 2012, Coinbase is well-known for its competitive trading costs, advanced trading tools, user-friendly interface, and powerful security measures. 

For retail traders, Coinbase offers both cryptocurrency futures and perpetual contracts tailored to their needs. Using derivative contracts built for various risk levels and trading styles, you can access leverage to increase your position sizes or create new positions with less upfront capital.

If you frequently trade Ethereum or Bitcoin futures, Coinbase can be your ideal crypto trading platform, as it allows 24/7 futures trading and tracks ETH and BTC price movements in real-time.

Additionally, Coinbase’s all-in-one, intuitive trading interface provides an integrated experience by enabling you to access 550+ spot pairs and 18+ futures pairs across various sectors like energy, metals, and cryptocurrencies. 

Moreover, Coinbase’s potent analytical tools, sophisticated charting capabilities, market data, deep liquidity, and live order books help traders monitor price movements in both spot and derivatives markets. 

The exchange also offers comprehensive learning resources in the form of explainer blogs, how-to guides, practical tips, and tutorials on advanced tools, which help both beginner and experienced traders navigate the complex contract trading landscape with ease. 

Lastly, Coinbase levies low trading fees for spot trading (0% maker) but relatively high charges for futures orders (0.4% maker and 0.6% taker). 

Pros

• Easy-to-use trading interface and a beginner-friendly contract trading platform.
• Offers staking services on 100+ crypto assets.
• Industry-leading security protocols, data encryptions, self-custody wallet, 2FA, and cold storage.
• Supports multiple order types such as market, limit, one-cancels-the-other(OCO), stop, and stop orders.
• Coinbase derivatives exchange has risk management features like max order check, exposure limits, kill switch, self-match prevention, etc.

Cons

• Crypto derivatives are not available for retail traders based in Spain or the UK.
• Charged by the Securities and Exchange Commission (SEC) in June 2023 for operating as an unregistered trading platform.
• Higher trading fees compared to the industry average.

6. Gemini 

Gemini is a popular contract trading platform known for its intuitive user interface-user experience(UI-UX) design, regulatory compliance measures, and security features. It is also widely accessible, as it operates in 50 U.S. states and over 70 countries globally.

One of Gemini’s standout characteristics is its advanced trading system called ActiveTrader. It is specially designed for experienced traders and offers a fully customizable trading interface with progressive charting tools. Thus, you can resize, rearrange, and personalize your interface by prioritizing the tools and charts that matter the most.

ActiveTrader also provides other benefits such as combined USD and GUSD (Gemini Dollar) order books, faster execution speed (in microseconds), and deeper liquidity. 

With Gemini, you can harness the power of dual markets by tracking and trading in two markets simultaneously. You can also run sophisticated risk management and hedging strategies in real time without continuously switching between multiple markets. 

If you’re seeking a crypto futures platform to make profits through directional exposure, Gemini Derivatives is the best. It enables you to trade in perpetual contracts, manage risks, and achieve capital efficiency by leveraging innovative features like cross-collateralization.

In terms of security, Gemini is the pioneer cryptocurrency exchange to obtain System and Organization Controls (SOC) 1 Type 2 and SOC 2 Type 2 certifications. It is also ISO (International Organization for Standardization) 27001-certified. 

Its other security features include 2FA, Yubikey support, address allowlisting, multi-signature cold storage, offline data centers for preserving private keys, and hardware security modules. The exchange follows a full-reserve model, ensuring that all assets are backed 1:1. Thus, you can easily withdraw your assets when needed. 

Additionally, Gemini offers a competitive fee structure, 0.02% maker and 0.07% taker fees, with discounts based on higher trading volumes. 

Pros

• Allows users to access market information and trading services through multiple application programming interfaces (APIs).
• No minimum deposit or account balance requirements to engage in spot or contract trading.
• Offers 100+ trading pairs across 70+ cryptocurrencies in 4 global currencies.
• Enables users to earn up to 5.51% APR on staked cryptocurrencies.
• Offers Cryptopedia, an extensive repository of explainer articles on blockchains, digital assets, DeFi, and Web3.
• Offers up to 100x leverage on contract trading.

Cons

• Doesn’t offer copy trading, demo trading, or trading bots.
• No phone support. Customer services can be contacted only via email.
• Supports contract trading in select jurisdictions only.

7. Kraken

Kraken is one of the best contract trading platforms for trading futures across 100+ markets swiftly. The average transaction execution time for derivative contracts on the platform is 45μs. 

With Kraken, you can take advantage of profitable opportunities in both bull and bear markets by going long or short on 100+ USD linear perpetual futures. You can also magnify your buying and selling power by utilizing leverage, with competitive trading fees starting at 0.02% for makers and 0.05% for takers. 

Institutional traders are charged a low taker fee of 0.08%, provided their 30-day trading volumes cross $100M and $500M for spot and futures trades, respectively. 

Another advantage of Kraken is that when you trade contracts, you can convert the profits into a currency of your choice. Moreover, Kraken Pro allows traders to seamlessly switch between futures and spot trading. Thus, they can utilize derivative contracts as risk management instruments to hedge price movements in the spot market. 

Kraken Pro’s all-in-one trading interface enables you to easily switch between spot, margin, and derivative trades. The interface is also highly customizable, allowing you to choose from different layouts and 25+ trading widgets. You can also build, arrange, and save multiple dashboards based on your trading style.

Additionally, the platform supports multiple order types such as stop loss, trigger, take profit, immediate or cancel (IOC), and reduce-only. 

Lastly, Kraken offers cutting-edge security features such as PoR, 2FA, Pretty Good Privacy (PGP)-signed and encrypted e-mails, cold storage, hot wallet solutions, email confirmations for adding withdrawal addresses, global settings time locks, and SSL encryptions of confidential data. 

Pros

• Flexible fiat and crypto funding options with nominal fees.
• Advanced trading analytics and a consolidated portfolio view to track historical performances and account balances.
• Easy to navigate trading interface with advanced tools and technical indicators to analyze trends, monitor order books in real-time, and compare up to 4 markets at once.
• Premium OTC portal with deep liquidity, 24/7 access, and minimal slippage to execute orders over $50,000.
• A responsive mobile app with a mobile-first architecture, advanced trading tools, and security features.

Cons

• Traders based outside the US or in the states of New York, Texas, and Washington can’t fund their Kraken accounts with USD via ACH transfers for free.
• The Kraken mobile app is available in limited geographies only.

8. MEXC

If you’re seeking a contract trading platform with a super-fast trading engine, extremely low fees, profound liquidity, leverage of up to 500x, and a wide selection of crypto assets, MEXC is the right platform for you.

MEXC’s high-performance engine processes up to 1.4 million transactions per second, delivering a high-speed, trustworthy, efficient, and seamless trading experience. 

With a global user base of over 30 million across 170+ nations, MEXC offers comprehensive liquidity to buy/sell tokens in the spot market or trade contracts in the derivatives market. It supports 3000+ spot pairs and 700+ futures pairs.

In terms of trading costs, MEXC charges the lowest fees compared to other exchanges on the list. It allows users to trade up to 100 pairs at zero fees. For spot, no maker fees are imposed, and the taker fee is 0.05%. For trading futures, you must incur a maker fee of 0.01% and a taker fee of 0.04%. 

One of the prime advantages of trading derivatives on MEXC is its industry-leading liquidity. 90% of the futures pairs are highly liquid, enabling you to earn steady returns or curtail losses even during extreme market volatility. 

Those who are new to contract trading can browse the exchange’s “Learn” section to get explainer articles on all things blockchain, including beginner guides, tutorials, and trading tips.

You can trade USDT-M, USDC-M, and Coin-M futures on MEXC. Newcomers can simulate the USDT-M futures trading on the demo trading platform. They can also access the copy trading platform to follow expert traders. 

Regarding security measures, MEXC’s reserve rate surpasses 100%, meaning users don’t need to worry about withdrawal runs. The exchange combines cold storage and hot wallet strategies to preserve users’ assets and has set up a Futures Insurance Fund to compensate users for losses exceeding margins. 

Pros

• Offers lucrative rewards of over $150 million.
• Multilingual 24/7 customer support with customized content, native language options, prompt response rate, expert guidance, and localized trading experience.
• Publishes big data, including vital metrics like long-short position holders ratio, active buys and sells, liquidations, and elite account trading activity. 
• Helps users buy cryptocurrencies using 50+ fiat currencies, bank accounts, and multiple third-party payment gateways like Banxa, Moonpay, and Mercuryo.
• Facilitates grid trading of futures.

Cons

• Doesn’t support fiat withdrawals.
• Faces regulatory challenges in various jurisdictions.
• More suitable for crypto-to-crypto trading, as MEXC doesn’t allow crypto purchases using local fiat currencies.
• No services are provided in the UK, the US, or Canada.
• Lacks DeFi services and a non-fungible token(NFT) marketplace.

9. Phemex 

Phemex is a Singapore-based contract trading platform with over 5 million registered users across 150 countries. Designed for both beginner and advanced traders, Phemex offers a wide range of trading products and services, including spot trading, derivatives trading, automated bots, and direct cryptocurrency purchases through bank transfers or credit/debit cards.

If you’re exploring options for trading futures with leverage, Phemex is worth considering. It enables trading in 484+ futures pairs with up to 100x leverage. You can either opt for perpetual contracts using stablecoins as margins or those utilizing cryptocurrencies as collateral. 

The exchange has also introduced a new “Pilot” functionality to help users trade high-potential coins with leverage to magnify returns. 

Additionally, you can clock higher profits by automating contract trading strategies using pre-programmed bots such as Futures Grids, Futures Martingale, and signal trading. 

You can also configure bots to eliminate manual errors and optimize market timing by setting parameters like upper and lower price boundaries, grid levels, grid type (arithmetic or geometric), and position sizes.

The Phemex mobile app has a responsive UI-UX design and delivers all features at your fingertips, helping you execute trades seamlessly while on the move.

To safeguard user assets and sensitive information, Phemex has deployed security measures such as cold storage, multi-factor authentication, anti-phishing codes, encrypted transactions, withdrawal whitelists, and live safety tracking. 

Another striking feature of Phemex is its competitive fees, 0.01% maker, and 0.06% taker for trading contracts in the futures market. If you join the VIP program, you can avail of exclusive fee discounts, and at the highest tier, no maker fees are levied, and taker fees drop to 0.03%.

Pros

• Supports 527+ spot pairs and 484+ futures pairs.
• Lightning-fast trading engine and nominal trading fees.
• Mock trading platform for traders to test new trading strategies.
• Facilitates Phemex Token staking to earn passive income.
• Phemex Academy with comprehensive and unbiased resources on the blockchain world.
• Launchpad to get early access to hot coins and MemeX to trade on-chain memes instantly.

Cons

• Unavailable in the US and the UK.
• Lacks operating licenses in certain jurisdictions, posing regulatory challenges and risks.
• Slow response rate of the customer support team, especially during peak hours.

10. PrimeXBT

PrimeXBT is the best contract trading platform for trading contracts for differences(CFDs) in the cryptocurrency market. The platform provides a multi-asset trading environment, enabling you to trade crypto derivatives, stocks, commodities, and forex instruments using a single account.

In terms of trading charges, PrimeXBT imposes 0% fees when trading CFDs on shares, indices, commodities, and forex. For crypto CFD trading, you must incur 0.05% fees. The minimum deposit for trading CFDs ranges between $1 and $10. 

Additionally, the exchange imposes low fees starting from 0.01% for trading perpetual contracts on Bitcoin and altcoins in the futures market. While the maker fee remains 0.01%, regardless of volumes of trade, the taker fee can be as low as 0.02% for traders with 30-day volumes above $20 million.

Other hallmark features of PrimeXBT include flexible funding rates, isolated margins, deep liquidity, adjustable leverage for contract trading, proprietary order books, and TradingView integration. 

Moreover, PrimeXBT offers two trading interfaces: the proprietary browser-agnostic PrimeXBT Webtrader and the device-agnostic MetaTrader5 (MT5). The prime attributes of MT5 include tight spreads as low as 0.1, ultra-fast trade executions, leverage up to 1000:1, and zero commissions. 

With MT5, you can analyze crypto assets, futures, and other financial instruments precisely using 38+ technical indicators and 44+ charting tools, and unlock new order types. 

Furthermore, PrimeXBT’s copy trading platform has over 100,000 clients worldwide, providing innumerable expert trading strategies to follow. If you are a master trader, you can share your winning strategies and earn up to 20% on follower profits. 

Lastly, PrimeXBT’s notable security and compliance measures include cold storage with multi-signature technology, 2FA, withdrawal whitelisting, data encryption, penetration testing, and CloudFlare for mitigating Distributed Denial of Service (DDoS) attacks.

Pros

• Provides access to 100+ CFD markets.
• Enables automated trades using expert advisors.
• Offers live price charts to track price movements across different markets.
• Efficient mobile trading interface with powerful tools.
• Publishes featured research articles, a trading glossary, and extensive educational resources.
• Imposes zero deposit fees.

Cons

• Higher fees for crypto CFD trading.
• No cross-margin mode for cryptocurrency futures. 
• No passive income-earning options like staking or liquidity mining. 
• Lacks a demo trading feature.
• Customer assistance is available only via email or live chat. No phone support.

What is Crypto Contract Trading?

Crypto contract trading is an agreement between two parties to buy or sell a crypto asset at a predetermined price on a specified date in the future. 

Unlike spot trading, where traders must buy or own the cryptocurrency, contract trading helps traders speculate on crypto price movements without owning the underlying asset. 

These contracts are usually standardized and include delivery terms, settlement procedures, strike (exercise) price, asset quality cum quantity, and maturity date. 

Contract trading is also called leveraged or margin trading because it helps traders use borrowed funds to increase their position sizes and trade larger value contracts by investing a small amount of capital upfront.

With leverage, you can improve capital efficiency, increase asset exposure, and magnify potential gains without pumping in additional funds. On the flip side, margin trading can also amplify potential losses if the market or asset prices move unfavorably. 

Contract trading requires an in-depth understanding of crypto markets and the ability to predict price movements accurately based on historical trends, current patterns, key developments, news, or events in the crypto world. Thus, it is more suitable for experienced traders with sound knowledge of crypto assets, risk management, fundamental and technical analysis, and advanced trading tools.

Pros

• Amplifies potential gains as small price changes can generate staggering profits.
• Facilitates short selling, enabling traders to garner profits during both bull and bear runs.
• Serves as a hedging mechanism against market volatilities and price fluctuations.

Cons

• Unsuitable for novice traders with zero or minimal knowledge of cryptocurrencies, blockchains, decentralized applications (dApps), and advanced trading tools.
• Carries high risks of liquidation due to unexpected market movements or leverage mismanagement.
• High funding rate and leveraged trading fees.

Spot Trading Vs Contract Trading: Key Differences

Spot trading	Contract trading
Requires you to buy, own, and deliver the underlying cryptocurrency.	Allows you to speculate on an asset’s price movements without owning or purchasing it.
Suitable for Beginners with minimal knowledge of cryptocurrency trading or risk management tools	Suitable for experienced traders as crypto contract trading is complex.
Gains only if you sell the crypto asset at a price higher than its purchase price.	Gains in both rising and falling markets, provided you analyze the market, estimate prices, and trade crypto diligently.
It is less risky and suitable for investors who wish to buy and hold cryptocurrencies.	It is more conducive for hedging and short-term speculations.

Types of Crypto Contracts

Crypto futures contracts

They are financial instruments that enable two investors to bet on the price movements of the underlying crypto asset. They help you make gains from a cryptocurrency’s future price without owning it. Hence, you don’t need to set up a crypto wallet or incur expenses on custodial solutions to store the asset in cold storage. 

Cryptocurrency futures are cash-settled contracts, meaning one party must pay the fiat value of the underlying cryptocurrency to another party at a pre-fixed price (strike or exercise price) on a later date before the contract expires (maturity or settlement date). 

Crypto options contracts

They are a type of derivative contract, where the option holder (buyer) has the right to buy or sell the underlying cryptocurrency at a set price (strike or exercise price) on or before a future date (maturity or expiry date). Unlike futures contracts, the option buyer has no obligation to execute the contract. 

However, an option seller is obligated to fulfill the transaction if the buyer exercises the option to buy or sell the asset. To buy an option contract, the buyer must pay an option premium to the seller. 

Options contracts are primarily of two types, call and put. While call options allow the buyer to purchase the underlying crypto at a prescribed price within a specified timeframe, put options enable the buyer to sell the asset at a pre-defined price within a specific period. 

Perpetual contracts

They are cryptocurrency futures or option contracts with no expiration date, enabling you to bet on the prices of the underlying cryptocurrencies indefinitely. 

Perpetual futures are derivative instruments with no fixed maturity date or settlement price. They are constantly adjusted using a funding rate mechanism to keep the contract price aligned with the spot rate of the underlying crypto.

Similarly, perpetual options don’t have a set maturity date or exercise price. They give option buyers the right, but not the obligation, to purchase (call option) or sell (put option) the underlying crypto at a price point of their choice. This exotic contract ensures that the option holder’s potential to buy or sell the asset at a particular price point never expires. 

Most exchanges offer perpetual futures on various cryptocurrencies, but only a handful of platforms like Panoptic and EthosX offer perpetual options.

Stablecoin-settled derivatives

These contracts are settled in stablecoins, especially USDT and USDC. As stablecoins are pegged 1:1 to a fiat currency such as USD, Euro(EUR), Great British Pound (GBP), etc., volatile price movements of cryptocurrencies are unlikely to lower your gains considerably. 

Consequently, your account balances, maintenance margin requirements, and potential profits won’t fluctuate widely. With stablecoin-settled contracts, profit and loss calculations, tax filing, and portfolio tracking become easier. 

Collateralized crypto contracts

They are coin-settled agreements, meaning the contract settlement is done in the underlying cryptocurrency, such as Bitcoin, Ethereum, or Solana, instead of a fiat currency or stablecoin, on the expiration date. 

Inverse futures

In inverse contracts, profits and losses are settled in crypto and calculated as an inverse of the asset price in a fiat currency.

For example, in a BTCUSD inverse contract, where you trade Bitcoin’s USD price, the contract is quoted in USD, settled in BTC, and the profit or loss is based on the inverse price movement. If the BTCUSD price decreases, PnL (in Bitcoin) increases if you’re short and decreases if you’re long, and vice versa. Thus, your BTC balance grows when short and declines when long.

How to Choose The Best Contract Trading Platform?

Leverage and margin options

While choosing a contract trading platform, you must look at the margin and leverage options. Platforms supporting both isolated and cross-margin modes and offering adjustable leverages based on your risk-return appetite are best suited for crypto contract trading. 

Fees

Trading costs, including maker and taker fees, funding rates, and other hidden charges, drain your profits considerably, especially if you are a high-frequency trader. Thus, you must choose contract trading platforms with minimal fees and no hidden costs. 

Contract Types

Each platform specializes in certain types of trading products and derivative contracts. For example, Binance and Bybit are the best contract trading platforms for crypto options. PrimeXBT is the right platform for CFD trading in the cryptocurrency market. Gemini is good for trading perpetual contracts, while Coinbase is better for trading futures with expiry dates. 

User Experience

User experience varies across contract trading platforms and devices. Some platforms offer a better user experience on desktops and laptops, while some are primarily designed for tablets and smartphones.

If you’re looking for specific functionalities such as customizable order books, multi-chart layouts, or one-tap TP/SL adjustments, it’s important to evaluate which platforms offer these features and how well they perform on different devices.

Supported Assets

Some contract trading platforms offer only futures or perpetual contracts for trading, while some support options as well. A few platforms like PrimeXBT also allow users to trade stocks, indices, forex, CFDs, and commodities along with cryptocurrencies. Large exchanges like Binance provide additional products and services like NFT marketplaces, launchpads, crypto loans, staking, liquidity mining, and yield farming. 

Thus, you must choose the best contract trading platform based on your specific needs, trading goals, and preferences. Evaluate whether you’re focused solely on futures, interested in options, or seeking a wider range of assets and services. 

Trading Tools

Ideally, a contract trading platform must have advanced charting tools, real-time order book data, and customizable technical indicators. It should also support risk management features like stop-loss, take-profit, and adjustable leverage.

Security

Before you deposit funds on a contract trading platform, you must ensure it has powerful security features. You should check if the chosen exchange has implemented safety measures such as multi-factor authentication, anti-phishing codes, multi-signature cold storage, hot wallet solutions, insurance funds, bug bounty programs, etc., to protect user assets. 

You must also check if the platform has been hacked before and the magnitude of losses such incidents have caused. In short, select a contract trading platform that is resilient to cyberattacks and helps users recover losses in the event of any mishap.

Liquidity and Execution Speed

The deeper the liquidity of a contract trading platform, the higher its trade execution speed, and the lower the slippage. Therefore, before making the final choice, it is essential to evaluate order book depth to gauge the degree of liquidity offered by a platform. Additionally, platforms with wider bid-ask spreads have slim liquidity and hence must be avoided.

Regulatory compliance

As cryptocurrency trading is risky, you must minimize your exposures by choosing contract trading platforms that comply with KYC and Anti-Money Laundering (AML) norms and other crypto laws. These platforms should also meet the regulatory requirements in the countries they operate in and possess valid licenses to function.

Conclusion

Contract trading can be highly rewarding, but it’s equally risky. Moreover, choosing a contract trading platform with the most convenient user interface or the lowest fees is not the correct approach. The right platform is the one that works well for you and meets your requirements. 

In general, choose legally compliant platforms that offer advanced security, intuitive trading interfaces, sophisticated trading tools, high liquidity, copy and demo trading features, and transparent fee structures. You should also do your own research and apply due diligence to identify the right platform based on your trading objectives and risk-return profile.

FAQs

Is contract trading legit?

Yes. Contract trading is a legitimate way to gain exposure to cryptocurrencies using leverage or margins, and is offered by many crypto exchanges worldwide. However, it is highly risky. Hence, understanding blockchains, related technologies, advanced trading strategies, risk management tools, market and price movements, latest developments, and crypto derivatives is imperative.

What is the difference between futures and perpetual contracts?

Futures contracts are settled at a pre-defined price on or before the expiration date of the contract. Conversely, perpetual contracts speculate on the future price movements of the underlying cryptocurrencies but don’t have an expiration date or prescribed settlement price. Thus, investors can hold perpetual contracts indefinitely, while futures contracts can be held only for a specified period.

How risky is contract trading?

Contract trading is highly risky if you don’t know proper risk management strategies. While margined borrowings and leverage amplify your trading power, they also magnify liquidation risk. Moreover, the volatile nature of cryptocurrency markets can result in rapid liquidation, wiping out your funds completely. Therefore, contract trading is advisable for traders who can manage risks and protect their capital efficiently. 

Who is the best crypto trading signal provider?

Finding accurate crypto trading signals helps you make informed decisions and apply the right trading strategies to maximize your gains and minimize losses. Some of the top trading signal providers or Telegram channels are Evening Trader, Fat Pig Signals, Binance Killers, and Crypto Inner Circle. 3Commas is the best signal provider for automated bots, while Learn2Trade is excellent for obtaining AI-powered cryptocurrency trading signals. For NFT traders, CoinCodeCap is the best. 

What is the best contract trading strategy?

The best contract trading strategy is to set stop loss orders, as they automatically close your positions when the price reaches a specified level, limiting your losses. If you’re 50% up on a leveraged trade, you can specify a take-profit order to book profits before the market reverses. Some general tips you must follow while engaging in contract trading are maintaining sufficient margins in your account to prevent auto-liquidation, using low leverage, and diversifying trading strategies. 

What is the best crypto contract trading platform in the USA?

To trade crypto, Coinbase is overall the most preferred exchange for US traders. For contract trading at nominal fees, BTCC is the best platform in the US, followed by BYDFi and Kraken.