What is the concept of perpetual futures in the cryptocurrency market?

3 answers

• Hans LehmannDec 22, 2021 · 3 years 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 regular futures contracts, perpetual futures do not have an expiration date, which means they can be held indefinitely. This makes them popular among traders who want to take long or short positions on cryptocurrencies without the need to constantly roll over their positions. Perpetual futures also have a funding mechanism that helps to keep the contract's price in line with the spot price of the underlying asset. This funding mechanism ensures that traders who are long on the contract pay funding to traders who are short, or vice versa, depending on whether the contract is trading at a premium or discount to the spot price. Overall, perpetual futures provide traders with a flexible and efficient way to gain exposure to the cryptocurrency market.
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• IVY NAGIDEAug 15, 2020 · 5 years ago
  Perpetual futures are like regular futures contracts, but with a few key differences. First, perpetual futures do not have an expiration date, which means they can be held indefinitely. This is in contrast to regular futures contracts, which have a fixed expiration date. Second, perpetual futures have a funding mechanism that helps to keep the contract's price in line with the spot price of the underlying asset. This funding mechanism ensures that the contract's price stays close to the spot price, which reduces the risk of manipulation. Finally, perpetual futures are settled in cryptocurrency, rather than in cash like regular futures contracts. This means that traders need to have a cryptocurrency wallet in order to trade perpetual futures. Overall, perpetual futures offer traders a flexible and efficient way to gain exposure to the cryptocurrency market without the need to constantly roll over their positions.
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• shravyaJan 15, 2024 · a year ago
  Perpetual futures are a type of derivative contract that allows traders to speculate on the price of an underlying asset without actually owning it. They are similar to regular futures contracts, but with a few key differences. Unlike regular futures contracts, perpetual futures do not have an expiration date, which means they can be held indefinitely. This makes them popular among traders who want to take long or short positions on cryptocurrencies without the need to constantly roll over their positions. Perpetual futures also have a funding mechanism that helps to keep the contract's price in line with the spot price of the underlying asset. This funding mechanism ensures that the contract's price stays close to the spot price, which reduces the risk of manipulation. Overall, perpetual futures provide traders with a flexible and efficient way to gain exposure to the cryptocurrency market.
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