What are crypto derivatives? Crypto derivatives are financial contracts that derive value from a cryptocurrency without requiring ownership. The four main types are futures, perpetuals, options, and CFDs. Volity offers crypto derivatives trading via CFDs with 1:50 leverage, no expiry, and CySEC-regulated execution under UBK Markets.
Crypto derivatives trading lets you take leveraged exposure to Bitcoin, Ethereum, and other cryptocurrencies without owning them on-chain. Volity is your all-in-one money hub. Trade crypto CFDs that mirror futures and perpetual exposure on Volity MT, with leverage up to 1:50, segregated funds, and CySEC-regulated execution under UBK Markets.
What crypto derivatives trading means on Volity
Crypto derivatives are contracts whose value comes from an underlying cryptocurrency. The retail market splits them into four overlapping categories:
- Futures: standardised contracts with expiry dates, settled in cash or coin
- Perpetual contracts (perps): futures without expiry, kept anchored to spot via funding rates
- Options: rights but not obligations to buy or sell at a strike price
- CFDs (Contracts for Difference): open-ended OTC contracts that mirror the price action without expiry or funding
Volity offers crypto exposure primarily through CFDs. The mechanics give you futures-style leverage without the operational overhead of expiry rolls, custody management, or on-chain settlement risk. Open a position, hold as long as you want, close when the trade is done. No coin to send to your own wallet, no gas fees, no key management.
What you can trade through crypto derivatives
- Bitcoin (BTC) CFD trading platform, long or short, up to 1:50 leverage
- Ethereum (ETH) CFD, long or short, up to 1:50 leverage
- Stablecoin pairs: USDT, USDC against major fiat
- 18 additional crypto pairs including BCH, LTC, XRP, SOL, ADA, DOGE, LINK, DOT, AVAX, MATIC, ATOM, ALGO, FIL, NEAR, APT, ARB, OP
All instruments are accessible from the same Volity MT terminal that handles your forex, indices, commodities, and stocks. One account. One login. One margin pool.
How leverage works (and what it actually costs)
Leverage on Volity crypto CFDs goes up to 1:50 on selected products. The maths is direct:
- 1:10 leverage means $1 of margin controls $10 of notional exposure. A 10% move against you wipes 100% of margin
- 1:20 leverage means $1 controls $20. A 5% move wipes margin
- 1:50 leverage means $1 controls $50. A 2% move wipes margin
Crypto routinely moves 2-5% in a day. At 1:50 leverage that means full margin destruction is a Tuesday-afternoon event, not an outlier scenario. Volity provides negative balance protection so you cannot go below zero, and stop-loss orders so you can cap the damage before it reaches that point. The platform displays required margin and liquidation price before order entry.
The cost of holding a leveraged position past 22:00 GMT is the swap (overnight financing) charge. On crypto CFDs this can be positive or negative depending on the funding-rate market. Volity exposes the rate before you hold overnight.
Margin call vs liquidation
Two terms that matter:
- Margin call: the broker notifies you that equity is approaching the maintenance margin level. Some brokers issue this as an automated alert; some require additional funds. Volity uses thresholds set in your account settings
- Liquidation: if equity reaches the close-out level, Volity automatically closes positions to prevent further loss. With negative balance protection, the maximum loss is your deposit, not more
Active position management beats reactive liquidation. Use stop-losses. Reduce leverage when volatility expands.
CFD vs futures vs perp, quick comparison
| Feature | Volity CFD | Standard futures | Perpetual contract |
|---|---|---|---|
| Expiry | None | Yes (monthly/quarterly) | None |
| Funding rate | No funding rate, swap fee on overnight | None (settled at expiry) | Funding rate every 8 hours |
| Leverage | Up to 1:50 | Varies, regulated | Often 1:100-1:125 (offshore) |
| Custody | Volity-held | Exchange-held | Exchange-held |
| Liquidation | Volity threshold | Exchange threshold | Exchange threshold |
| Short selling | Yes | Yes | Yes |
| Regulation | CySEC-regulated execution | Tier-1 regulated (e.g., CME) | Mostly offshore, varies |
For most retail traders, the CFD model on Volity simplifies the trade-off: you get the leverage and short-selling of futures without the expiry-roll administration or the funding-rate volatility of perpetuals.
Costs in plain terms
- Spread: the bid-ask difference. Volity shows the live spread before order entry
- Swap (overnight financing): positive or negative, applied at 22:00 GMT for positions held overnight
- Commission: $0 per trade on Standard accounts for most products
- Wallet: $0 to hold, free internal transfers
- FX conversion: 1% when funding in one currency and trading in another
There is no exchange-style maker/taker fee. The cost of trading is built into the spread.
Risk in plain terms
Crypto is the most volatile asset class on Volity. Leverage on crypto multiplies that volatility. Specific risks worth naming:
- Gap risk: crypto trades 24/7, but you sleep. Adverse moves while you are away can hit your stop or your liquidation level
- Funding-rate analogues: while CFDs do not have perp-style funding, the swap fee on overnight positions changes with the rate market
- Concentration risk: trading only crypto on a leveraged account concentrates exposure to one volatile asset class
- Correlation in stress: during market-wide selloffs, crypto correlates with risk assets like tech stocks. “Diversification” across BTC, ETH, and altcoins is shallow protection
Volity gives you the tools (stop-losses, position-sizing, demo accounts, negative balance protection). Risk management is the trader’s job.
When CFDs beat spot and when they do not
Use crypto CFDs when: – You want leveraged exposure without managing custody – You want to go short without borrowing coin – You want one account for crypto, forex, indices, commodities – You hold a position for days or weeks, not months
Use spot crypto trading platform (buy and hold in Volity wallet) when: – You want long-term ownership and self-custody options – You plan to use crypto for payments, transfers, or staking – You do not want exposure to overnight swap fees – You want to compound over years, not trade weekly
The good news: on Volity, both are available in the same account. Hold BTC in your wallet for the long term. Trade BTCUSD CFDs in your trading layer for short-term moves. One login, one balance, one execution layer.
Sources
Related Volity platforms
- Crypto Trading Platform: 20+ coins on Volity MT
- CFD Trading Platform: 10,000+ markets
- Commodity Trading: 150+ markets
- Trade with Volity: 80+ countries
Frequently asked questions
What are crypto derivatives?
Crypto derivatives are financial contracts that derive their value from a cryptocurrency, without requiring you to own the coin. The main types are futures, perpetuals, options, and CFDs. Volity offers crypto exposure mainly through CFDs that mirror futures-style leverage with no expiry, no on-chain custody, and no gas fees. You trade the price action; the underlying coin stays out of your direct ownership.
How do crypto CFDs differ from futures and perpetuals?
CFDs have no expiry (unlike standardised futures) and no funding rate (unlike perpetuals). You hold the position as long as you want; the only ongoing cost is the swap (overnight financing) fee charged at 22:00 GMT. Futures require expiry-roll management. Perpetuals require attention to funding rates that change every eight hours. CFDs on Volity simplify both away.
Is crypto derivatives trading on Volity legal where I live?
Crypto CFD trading is permitted across the EU, UK, Singapore, UAE, Australia, and most other jurisdictions. Service is restricted in the United States. Per-country eligibility varies; the onboarding flow checks your jurisdiction during KYC. If your country is not supported, you will see this at signup before depositing funds.
What leverage does Volity offer on crypto derivatives?
Up to 1:50 on selected crypto products. Leverage is product-specific and visible before order entry. Higher leverage means smaller adverse moves wipe your margin faster. A 2% move against a 1:50 position destroys 100% of margin.
Is there an expiry on Volity crypto CFDs?
No. Volity crypto CFDs are open-ended. You hold the position as long as you want, paying the swap fee on each overnight rollover. There is no contract roll to manage and no expiry-driven close-out.
How are crypto CFDs taxed?
Tax treatment depends on your country of residence. In most EU jurisdictions, CFDs on crypto are treated as derivatives and taxed on realised P&L, separately from spot crypto held for investment. Volity does not provide tax advice; consult your local advisor. Volity provides annual statements showing your realised gains and losses for tax filings.
Can I use a bot or EA for crypto derivatives on Volity?
Yes. Volity MT supports Expert Advisor (EA) automation on MT4 and MT5, and REST/WebSocket API access for custom integrations. High-frequency strategies are welcome; VIP-tier accounts unlock additional API limits and lower spreads.
