Short and Long Position in financial markets is a feature that allows you to take advantage of price reductions and increases.
Generally, markets that have the ability to take advantage of falling and rising prices are called two-way markets. This means that it is no longer important for the trader that the price of a currency or asset is higher or lower, it is important that the trader can correctly identify the price movement. There is a similar feature in other traditional markets, such as the foreign exchange market (Forex). But the Iranian stock market is a one-way market that can only be profited by predicting the price increase trend and this is one of the disadvantages of this market.
Future contracts are generally contracts in which the parties of a transaction enter into an asset or commodity on a specified date at a future time and at a specified price. These contracts are used in global financial markets such as the Forex market and future markets active in Iran such as the coin and Saffron futures market with the same definition.
But when it comes to these contracts in the cryptocurrency market, the definition changes a bit.
The definition of these future contracts will be slightly different in cryptocurrency futures contracts, which are only available in some exchanges. It is based on the transaction of an asset in the future at a certain price, but there is no news of a specific time for the transaction.
Why do traders use futures trading?
Risk management: As mentioned, the main reason for creating future contracts in financial markets and its use by traders, especially financial market professionals, is risk and capital management.