Are there any specific risks associated with trading perpetual futures contracts compared to quarterly futures contracts in the digital currency space?

3 answers

• Nguyên Lê NgọcJun 21, 2024 · a year ago
  Trading perpetual futures contracts in the digital currency space comes with its own set of risks. One specific risk is the potential for funding fees. Unlike quarterly futures contracts, perpetual futures contracts require traders to pay funding fees to maintain their positions. These fees can add up over time and affect the overall profitability of the trades. Additionally, perpetual futures contracts are subject to funding rate fluctuations, which can result in unexpected costs for traders. It's important for traders to carefully consider these risks and factor them into their trading strategies.
  606

  303
• Owen GenzlingerMar 31, 2023 · 2 years ago
  When it comes to trading perpetual futures contracts compared to quarterly futures contracts in the digital currency space, there are a few specific risks to keep in mind. One risk is the possibility of liquidation. Perpetual futures contracts have no expiration date, which means that traders need to closely monitor their positions to avoid being liquidated. Another risk is the potential for price manipulation. Since perpetual futures contracts are settled based on an index price, there is a risk that the index price can be manipulated, leading to unfair settlements. Traders should be aware of these risks and take appropriate measures to mitigate them.
  660

  220
• Sai SathwikMar 14, 2025 · 3 months ago
  According to BYDFi, a digital currency exchange, there are several specific risks associated with trading perpetual futures contracts compared to quarterly futures contracts. One risk is the potential for funding rate volatility. Perpetual futures contracts are designed to closely track the spot price of the underlying digital currency, which means that the funding rate can change frequently. This volatility can result in unexpected costs for traders. Another risk is the possibility of market manipulation. Since perpetual futures contracts have no expiration date, there is a risk that market manipulators can exploit this feature to manipulate prices. Traders should carefully consider these risks and implement risk management strategies to protect their investments.
  775

  194