Example index (ALTS):
|BCH (Bitcoin Cash)||0.0005|
Index Futures can be used to hedge your exposure to a portfolio of altcoins.
Let's say your portfolio perfectly mirrors the ALTS index seen in the table above.
By going long on the USDC/ALTS future with 1x leverage you effectively retain the dollar value of your portfolio.
If the value of your portfolio drops, the losses will be offset by the profit generated by your position.
Conversely, if the value rises, the rise in value will offset the losses from your position.
This makes Index Futures extremely valuable for risk management.