What Are TradFi Futures?

What are TradFi Futures?

TradFi futures are derivative contracts that let you speculate on the price movements of traditional financial assets—like stocks, indices, and precious metals—without actually owning them. They offer a way to gain exposure to big-name companies and global markets while keeping the speed, flexibility, and familiar tools that crypto traders are used to.

With TradFi futures, you can go long if you expect prices to rise or short if you expect them to fall, giving opportunities to profit in any market direction. Leverage lets you control a larger position with less capital, amplifying both potential gains and risks. Unlike traditional stock trading, you don’t need to wait for exchange hours—you can conceptually monitor markets and respond quickly to global news.

For anyone familiar with crypto perpetual contracts, TradFi futures feel intuitive. They combine the accessibility and round-the-clock mindset of crypto trading with the stability and diversity of traditional finance, offering a simple way to diversify your portfolio and engage with markets that were once out of reach.

How Do TradFi Futures Work?

A futures contract is an agreement to buy or sell an asset at a predetermined price. TradFi futures simplify the mechanics for traders familiar with crypto contracts.

You open a position based on whether you think the price will rise (long) or fall (short). If the price moves in your favor, you profit from the difference. If it moves against you, you take a loss. You never own the stock, index, or metal itself. You are trading a contract that tracks its price.

Example

Tesla stock is trading at $250. You believe the price will rise, so you open a long position on a Tesla TradFi contract.

If Tesla rises to $270, you profit from the $20 price move, adjusted by your position size and leverage. If Tesla drops to $230, you lose $20 per contract. The trade settles in USDT, not in Tesla shares.

The experience is similar to trading BTC/USDT perpetuals — same interface style, same order types, same risk management concepts.

What Assets Can You Trade with TradFi Futures?

TradFi futures on Phemex cover assets from traditional financial markets that crypto traders usually access through separate brokerage accounts.

Stocks and indices include individual companies such as Tesla, Apple, and Nvidia, along with broader market indices. These contracts give exposure to equity markets without leaving the Phemex ecosystem.

Precious metals like gold (XAU) and silver (XAG) are also available, offering diversification beyond crypto-only positions.

All TradFi contracts use the same USDT margin system as crypto futures. Your existing balance works across both asset classes with no transfers or conversions required.

What Makes TradFi Futures Different from Traditional Stock Trading?

When you buy Tesla stock through a broker, you own part of the company. When you trade TradFi futures, you are speculating on price movement only. You do not receive dividends, voting rights, or shares.

This isn't a limitation — it's a different product for a different purpose. TradFi futures are built for active traders who want leveraged exposure and 24/7 access, not long-term investors building equity portfolios.

Why Can TradFi Futures Trade 24/7?

Traditional stock exchanges like the NYSE operate on fixed schedules — roughly 9:30 AM to 4:00 PM Eastern, Monday through Friday. Outside those hours, you can't trade.

TradFi futures bypass this limitation because you're not trading on the stock exchange. You're trading derivative contracts that track the underlying asset's price. The contracts exist on a trading infrastructure independent of the stock exchange.

This means you can conceptually open, close, and manage positions at any time — weekends, holidays, after-hours. When news breaks on a Sunday night, you don’t have to wait until Monday morning to react.

Note: While 24/7 trading is possible in theory, liquidity and price volatility may differ during periods when traditional markets are closed. The underlying spot market still operates on exchange hours, which can affect pricing dynamics.

How Are TradFi Futures Different from CFDs?

If you've traded with traditional brokers, you may have encountered Contracts for Difference (CFDs). TradFi futures on crypto exchanges share similarities but have key differences.

Both are derivatives that track an underlying asset's price without requiring ownership. The main distinctions are settlement currency (TradFi settles in USDT, CFDs in fiat), trading venue (crypto exchange vs. OTC broker), and the perpetual contract mechanics that crypto traders already understand from products like ETH perpetuals.

TradFi futures essentially combine the accessibility of CFDs with the perpetual contract structure familiar to crypto traders — no expiration dates, funding rate mechanisms, and leverage controls you already know.

What Do You Need to Know Before Trading TradFi Futures?

TradFi futures use the same mechanics as crypto perpetual contracts. If you're new to contract trading, here are the key concepts:

Perpetual Contract means there's no expiration date. Unlike traditional futures that settle on a fixed date, you can hold TradFi positions indefinitely.

Leverage lets you control a larger position with less capital. 10x leverage means $100 controls $1,000 worth of exposure. This amplifies both gains and losses.

Margin is the collateral required to open and maintain a position. Phemex's margin trading system works identically for TradFi and crypto contracts.

Funding Rate is a periodic payment between long and short holders that keeps the contract price aligned with the underlying asset's spot price.

Mark Price is the fair value price used to calculate unrealized profit/loss and liquidation levels.

If you are familiar with crypto futures, these mechanics are the same. The only difference is the underlying asset.

Who Are TradFi Futures For?

TradFi futures are designed for traders who want traditional asset exposure within a crypto trading environment.

• Existing crypto contract traders who understand leverage and margin can expand into stocks and precious metals without learning a new platform or opening a brokerage account.
• Active traders who want 24/7 market access benefit from trading traditional assets outside exchange hours.
• Traders seeking diversification can balance crypto positions with exposure to equities and metals — all from one account with one USDT balance.

If you've never traded leveraged contracts before, consider starting with Phemex's crypto futures to learn the mechanics. The risk profile is identical, and the Phemex Academy has resources to help you get started.

Frequently Asked Questions

Am I actually buying stocks or gold?

No. TradFi futures are derivative contracts based on price movements. You're not purchasing shares, ETFs, or physical assets — you're trading contracts that track their prices.

Can I Use Leverage With TradFi Futures?
Yes. TradFi futures let you use leverage to control larger positions with less capital, amplifying both gains and losses. Traders familiar with crypto futures will find the mechanics instantly familiar.

What are the risks?

TradFi futures carry the same risks as crypto futures — leverage amplifies both gains and losses. During low-liquidity periods (when traditional markets are closed), price movements may be more volatile. Only trade with capital you can afford to lose.

Key Takeaways

TradFi futures bring traditional markets into the crypto trading experience.

You trade stocks, indices, and precious metals using the same perpetual contract mechanics familiar from crypto futures. The assets are different, but the trading experience conceptually remains the same.