How do perpetual swaps work in the context of cryptocurrency trading?

3 answers

• Raseem YApr 29, 2022 · 4 years ago
  Perpetual swaps are a type of derivative contract that allows traders to speculate on the price movements of cryptocurrencies without actually owning the underlying asset. These swaps have no expiration date, hence the term 'perpetual'. They are designed to closely track the price of the underlying cryptocurrency by utilizing a funding mechanism that ensures the swap price stays in line with the spot price. Traders can go long or short on perpetual swaps, meaning they can profit from both upward and downward price movements. It's important to note that perpetual swaps are highly leveraged instruments, which means that traders can amplify their potential gains or losses. Therefore, it's crucial to have a solid understanding of risk management before engaging in perpetual swap trading.
  794

  397
• Kim KardashianMay 24, 2024 · 2 years ago
  Perpetual swaps work by utilizing a funding mechanism to keep the swap price in line with the spot price of the underlying cryptocurrency. This funding mechanism involves the payment of funding rates between long and short traders. If the perpetual swap price is trading at a premium to the spot price, long traders pay funding to short traders, and vice versa if the swap price is trading at a discount. This mechanism helps to prevent large deviations between the swap price and the spot price, ensuring that the swap accurately reflects the market sentiment. It's worth mentioning that perpetual swaps are popular among traders who want to hedge their positions or speculate on short-term price movements without actually owning the cryptocurrency.
  751

  251
• Hendrix NymannFeb 27, 2026 · a day ago
  BYDFi, a leading cryptocurrency exchange, offers perpetual swaps as part of its trading services. With BYDFi, traders can easily access a wide range of perpetual swaps for various cryptocurrencies. BYDFi's platform provides advanced trading features, including customizable leverage, real-time market data, and comprehensive risk management tools. Traders can take advantage of BYDFi's user-friendly interface and robust trading infrastructure to execute their trading strategies effectively. Whether you're a beginner or an experienced trader, BYDFi offers a seamless trading experience for perpetual swaps in the context of cryptocurrency trading.
  649

  163