As several crypto platforms introduce futures trading in India, investors are moving beyond traditional buy-and-hold strategies. Nischal Shetty, CEO of WazirX (which is one of the platforms that provides future trading), explains how futures work, their benefits, risks, and impact on trading decisions is now crucial.
How futures trading different from simply buying and holding cryptocurrencies?
Spot trading got Indians started: buy an asset, hold it, wait. But, futures are a different instrument.
You take a position on price direction without owning the underlying asset. That means traders can participate in both rising and falling markets and use capital more efficiently. But the risk is different too. Leverage, margin and liquidation become part of every decision.
Tax has also shaped user behaviour. When every spot transaction has a deduction attached to it, active traders start looking for more efficient ways to participate. Futures works differently from spot, so the cost structure is different too. For frequent traders, that matters.
Globally, derivatives already account for the majority of crypto trading activity. CoinGlass data shows derivatives made up roughly three-fourths of total crypto trading volume by mid-2025. Indian users are also showing interest in futures, mainly for hedging and short-term trading.
Key factors spot investor should consider when investing in crypto future:
Before getting started, traders need to understand what is different from spot investing.
- Leverage amplifies both gains and losses. Margin requirements mean a position can be liquidated quickly if the market moves against you.
- Position sizing, stop-losses and the cost of holding a position are not advanced concepts. They are basic, try to get proper knowledge about these, before you start investing
What are the most common mistakes retail investors make, and how can they manage risk more effectively?
The most common mistake is treating futures as a faster version of spot investing. It is not.
Spot investing rewards patience. Futures needs preparation. You need to know what happens if the trade goes wrong before you enter it.
The discipline is straightforward. Keep leverage low until you understand how positions behave under stress. Define the exit before you enter. Size positions so that a losing trade is a setback you can recover from, not something that removes you from the market.
The traders who last are usually the ones who protect capital first. Opportunities will keep coming. If you lose the capital, you lose the ability to participate in the next one.