Definition ∞ Derivatives strategies involve the planned use of financial derivative instruments to achieve specific investment objectives, such as hedging against price volatility, speculating on market direction, or generating income. In cryptocurrency markets, these strategies often utilize futures, options, and perpetual swaps. They require a sophisticated understanding of market dynamics and risk management.
Context ∞ News often covers how institutional investors and sophisticated traders employ derivatives strategies to manage risk or amplify returns in the volatile crypto market. Reports may detail the impact of these strategies on market liquidity and price discovery. Regulatory bodies are increasingly scrutinizing these practices to ensure market integrity and protect retail investors.
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