What is altcoin index perpetual futures and how does it work?

3 answers

• gnoveeJul 01, 2022 · 3 years ago
  Altcoin index perpetual futures are derivative contracts that allow traders to speculate on the future price movements of a basket of altcoins. These contracts are perpetual, meaning they have no expiration date. They are designed to track the performance of a specific altcoin index, which represents the overall price movement of a group of altcoins. Traders can go long (buy) or short (sell) these contracts, depending on their market outlook. The contracts are settled in cryptocurrency, usually Bitcoin or Ethereum. The value of the contracts is determined by the price of the underlying altcoin index. Traders can profit from both rising and falling prices by correctly predicting the future movements of the altcoin index.
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• Henneberg StaalJul 15, 2020 · 5 years ago
  Altcoin index perpetual futures work by using a funding mechanism to ensure the contract's price closely tracks the underlying altcoin index. This funding mechanism is used to maintain the contract's price close to the spot price of the altcoin index. If the contract's price deviates from the spot price, a funding rate is applied to traders' positions to bring the price back in line. This funding rate is exchanged between long and short traders every few hours. The funding rate is determined by the difference between the contract's price and the spot price, as well as the interest rate of the funding currency. This mechanism helps prevent large price discrepancies between the contract and the underlying altcoin index.
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• JanzstoneJun 04, 2023 · 2 years ago
  BYDFi, a leading cryptocurrency exchange, offers altcoin index perpetual futures as part of its trading products. These contracts provide traders with the opportunity to diversify their portfolio and gain exposure to a basket of altcoins without actually owning them. Traders can use leverage to amplify their potential profits or losses. BYDFi's altcoin index perpetual futures are settled in Bitcoin and have competitive trading fees. The exchange also provides advanced trading tools and features, such as stop-loss orders and real-time market data, to assist traders in making informed decisions. It's important to note that trading altcoin index perpetual futures involves risks and requires a good understanding of the market dynamics.
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