Bitcoin Futures Trading Quiz

1. What are Bitcoin futures?

• Bitcoin futures are derivative financial instruments that obligate a buyer to purchase an underlying asset at a specified price on a specific date.
• Bitcoin futures are physical coins that are exchanged for cash in a marketplace.
• Bitcoin futures are stocks that represent ownership in a cryptocurrency.
• Bitcoin futures are long-term investments that guarantee profits after a set period.

2. What is the underlying asset in Bitcoin futures?

• Dogecoin
• Ripple
• Bitcoin
• Litecoin

3. How do Bitcoin futures work?

• Bitcoin futures only allow long positions, rejecting short positions altogether.
• Bitcoin futures are solely based on speculation without any underlying asset.
• Bitcoin futures can be settled by delivery or by cash transfer.
• Bitcoin futures are only available to institutional investors and not to retail traders.

4. What is the maximum number of contracts an investor can have?

• Position limits are the maximum number of contracts an investor can have.
• There`s a minimum of one contract limit.
• All trades are unlimited for each investor.
• Each investor can only hold five contracts.

5. What is the minimum price fluctuation in Bitcoin futures?

• $25
• $100
• $10
• $50

6. How do investors profit from Bitcoin futures?

• Investors profit by selling their Bitcoin immediately after purchase.
• Investors profit by buying any cryptocurrencies at random.
• Investors profit by betting correctly on Bitcoin`s price movements.
• Investors profit by holding Bitcoin until it doubles in value.

7. What is a long position in Bitcoin futures trading?

• A long position means buying a futures contract with the expectation that the cryptocurrency`s price will rise.
• A long position means holding onto Bitcoin indefinitely without trading.
• A long position means selling a futures contract hoping the price will fall.
• A long position means trading Bitcoin only during market hours.

8. What is a short position in Bitcoin futures trading?

• A short position means buying a futures contract, expecting the asset`s price will rise.
• A short position means investing in altcoins while avoiding Bitcoin.
• A short position means selling a futures contract, betting that the asset`s price will decline.
• A short position means holding onto Bitcoin and waiting for its price to increase.

9. What is trend-following in Bitcoin futures trading?

• Trend-following is a method for determining the number of contracts to buy.
• Trend-following is a strategy involving identifying and following the direction of price trends.
• Trend-following is an approach to avoid trading during market volatility.
• Trend-following is a technique for predicting the exact price at which Bitcoin will trade.

10. What are the risks involved in Bitcoin futures trading?

• The risks involve low transaction costs, guaranteed profits, and always having price stability.
• The risks include high volatility, potential for significant losses, and the possibility of liquidation fees that may decrease your futures wallet balance to zero.
• The risks are primarily related to high fees, contractual obligations, and predictable market behavior.
• The risks consist of fixed income returns, secure long-term investments, and minimal market fluctuations.

11. How are futures fees calculated?

• Futures fees are based on underlying asset value and trading volume only.
• Futures fees are calculated solely from market fluctuations and investments made.
• Futures fees depend entirely on the time of day when trades are executed.
• Futures fees include order commissions, positions, and liquidation expenses.

12. What happens when a futures balance is liquidated?

• The position is closed, and the balance may decrease to zero.
• The position is doubled, increasing potential gains.
• The assets are transferred to a different market.
• The account is credited with a bonus.

13. What is the maximum loss that may occur when engaging in futures trading?

• Up to 50% of the invested capital.
• The loss of your entire futures wallet balance.
• Only based on market fluctuations.
• Limited to initial investment amount.

14. What is the Binance Futures quiz answer for the maximum loss?

• One-third of the wallet balance.
• Just the contract value.
• Half of the wallet balance.
• All futures wallet balance.

15. What is the Binance Futures quiz answer for the price used when liquidating a futures balance?

• Average Price
• Estimated Price
• Last Price
• Mark Price

16. What is the Binance Futures quiz answer for the Insurance Clear Fee?

• Yes, I am aware of the existence and calculation of the Insurance Clear Fee and the risks that may cause the balance to return to zero.
• The Insurance Clear Fee is optional and not necessary to consider.
• The Insurance Clear Fee is always fixed at a specific amount.
• No, the Insurance Clear Fee does not affect the balance.

17. What happens when the maximum quantity limit is reached in Binance Futures?

• The account will be temporarily suspended.
• The order will process but with a lower quantity.
• The order will fail, and an error will be reported.
• The order will go through but with higher fees.

18. What happens when using a stop-market order in Binance Futures?

• The order will be canceled automatically.
• The transaction will be held until the trigger price is reached.
• A limit order will be placed without execution.
• The transaction will be executed at the market price.

19. What is the correct behavior to use a Stop-Limit Order in Binance Futures?

• The limit order will be filled at the trigger price regardless of market movement.
• The order will be canceled entirely after the stop price is triggered.
• The order will be executed at the market price immediately without limit conditions.
• After the stop-profit and stop-loss price is triggered, the order will be placed at the limit price immediately, but the limit order may not necessarily be filled because the price has moved away.

20. What behavior should be avoided when engaging in futures transactions?

• Strong gambling, trading addictions, continuous losses, and blaming others.
• Diversifying across multiple futures.
• Investing in only one future.
• Holding positions for a long time.

21. What is required to continue trading on Binance Futures?

• Relying solely on automated trading bots for decisions.
• Following market trends and predictions only.
• Understanding the rules and risks of engaging in futures transactions.
• Maintaining a high trading volume regardless of conditions.

22. How are profits and losses calculated in futures trading?

• Profits and losses are determined solely by transaction fees only.
• Profits and losses are calculated by comparing the opening and closing prices of the position.
• Profits and losses are calculated using only the highest price during the trading period.
• Profits and losses are assessed based on the trading volume alone.

23. What should be done when encountering a failure to trade constantly?

• Ignore the problem and keep trying.
• Reduce the investment amount without investigation.
• Blame the trading platform for the issue.
• Check the network and retain information for customer service.

24. What are the components of futures fees?

• Order commissions, positions, and liquidation expenses
• Deposit fees, interest rates, and account charges
• Exchange costs, withdrawal fees, and trading margins
• Transaction fees, premiums, and maintenance costs

25. What is hedging in crypto futures trading?

• Hedging is a risk management strategy that aims to protect against potential losses from adverse price movements by taking a position in the futures market that is opposite to an existing position in the spot market.
• Hedging is a method of investing in multiple cryptocurrencies simultaneously to maximize profits.
• Hedging is a strategy that focuses solely on short-term trading and quick profits in the crypto market.
• Hedging involves buying and selling the same cryptocurrency to benefit from price fluctuations.

26. What is a grid strategy in crypto futures trading?

• A grid strategy involves setting a grid of predetermined price levels with buy orders placed below the current market price and sell orders placed above.
• A grid strategy is focused on long-term investments without any buy or sell orders.
• A grid strategy relies on market predictions without any specific buying or selling conditions.
• A grid strategy consists solely of selling futures contracts at a fixed price.

27. How do CME’s Bitcoin futures contracts work?

• CME’s Bitcoin futures contract requires physical delivery of Bitcoin on expiration.
• CME’s Bitcoin futures contracts must be settled through gold or silver equivalents.
• CME’s Bitcoin futures contracts are only available during market hours with limited trading options.
• CME’s Bitcoin futures contract is a USD cash-settled contract based on the CME CF Bitcoin Reference Rate (BRR).

28. What is the tick increment for CME’s Bitcoin futures contract?

• $100
• $25
• $50
• $10

29. How are CME’s Bitcoin futures contracts listed?

• The contracts are listed by random selection without any time frame.
• The contracts are listed annually in January and July only.
• The contracts are listed on the nearest six consecutive monthly contracts, inclusive of the nearest two December contracts.
• The contracts are listed every two weeks with no specific month preference.

30. What happens when one contract expires in CME’s Bitcoin futures?

• The next contract is added to the lineup.
• The trading session ends immediately.
• The investor loses their entire balance.
• The contract is automatically renewed.