What are the advantages and disadvantages of using forward contracts in the context of digital currencies?

1 answers

• May 01, 2022 · 3 years ago
  Forward contracts in the context of digital currencies can be advantageous for traders looking to hedge against price fluctuations. They offer stability and predictability, allowing traders to lock in a specific exchange rate for future transactions. However, forward contracts also come with limitations, such as inflexibility and counterparty risk. Traders should weigh the pros and cons before deciding to use forward contracts in the digital currency market.
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