What is the meaning of perpetual futures in the context of cryptocurrency?

3 answers

• Malik RashidJun 12, 2024 · a year ago
  Perpetual futures are a type of derivative contract in the cryptocurrency market that allows traders to speculate on the price of an underlying asset without actually owning it. Unlike traditional futures contracts, perpetual futures do not have an expiration date, hence the term 'perpetual'. They are designed to track the price of the underlying asset closely, usually through a funding mechanism that ensures the contract price aligns with the spot price. Traders can go long or short on perpetual futures, profiting from both upward and downward price movements. It's important to note that perpetual futures are highly leveraged instruments, which means traders can amplify their potential gains or losses. They have become popular in the cryptocurrency industry due to their flexibility and ability to trade 24/7.
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• Renan SouzaAug 05, 2022 · 3 years ago
  Perpetual futures are like the never-ending story of the cryptocurrency world. They are contracts that allow you to bet on the future price of a cryptocurrency without actually owning it. Unlike regular futures contracts, perpetual futures don't have an expiration date, so you can hold onto them for as long as you want. They are designed to closely track the price of the underlying asset, so if the price goes up, your contract value increases, and if the price goes down, your contract value decreases. It's a way for traders to make money off the volatility of cryptocurrencies without actually buying and selling them. Just be careful, because perpetual futures are highly leveraged, which means you can make big profits or big losses depending on how the market moves.
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• Upchurch KlosterApr 04, 2022 · 3 years ago
  Perpetual futures are a popular trading instrument in the cryptocurrency market. They are contracts that allow traders to speculate on the price of a cryptocurrency without actually owning it. Unlike traditional futures contracts, perpetual futures do not have an expiration date, which means you can hold onto them indefinitely. This makes them ideal for traders who want to take advantage of short-term price movements without the hassle of rolling over contracts. Perpetual futures are typically settled using a funding mechanism that ensures the contract price stays in line with the spot price. This mechanism involves periodic payments between long and short positions. It's worth noting that perpetual futures are highly leveraged, so traders need to be cautious and manage their risk accordingly.
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