A crypto derivatives exchange is a platform for trading financial contracts based on cryptocurrency prices. Unlike buying actual cryptocurrencies, traders on these exchanges deal with products like futures, options, or perpetual swaps that derive value from the underlying crypto asset. This allows them to speculate on price movements or hedge risk without owning the digital currency itself. Derivatives exchanges often offer leverage, meaning traders can use borrowed funds to amplify their positions. While this can lead to greater profits, it also increases the potential risk of substantial losses.