How do perpetual contracts work in the cryptocurrency market?

3 answers

• Amrit Kumar ChanchalNov 11, 2023 · 2 years ago
  Perpetual contracts are a type of derivative product that allows traders to speculate on the price movement of cryptocurrencies without actually owning the underlying asset. Unlike traditional futures contracts, perpetual contracts do not have an expiration date. They are designed to mimic the spot market by using a funding mechanism to ensure the contract price closely tracks the underlying asset's market price. This funding mechanism is used to maintain a fair market price and prevent large price discrepancies between the contract and the spot market. Traders can take long or short positions on perpetual contracts, profiting from both upward and downward price movements.
  681

  341
• Ran RenJan 29, 2025 · 6 months ago
  Perpetual contracts are like a never-ending game of speculation in the cryptocurrency market. They allow traders to bet on the future price of a cryptocurrency without actually owning it. Unlike traditional futures contracts, perpetual contracts don't have an expiration date, so you can hold your position for as long as you want. The contract price is usually tied closely to the spot market price through a funding mechanism. This mechanism ensures that the contract price stays in line with the underlying asset's market price. It's a popular way for traders to profit from both bullish and bearish market conditions.
  621

  207
• Hadiqa Khalid AhmedJan 03, 2025 · 7 months ago
  Perpetual contracts are an innovative financial instrument in the cryptocurrency market. They offer traders the ability to speculate on the price of cryptocurrencies without actually owning them. Unlike traditional futures contracts, perpetual contracts don't have an expiration date, which means you can hold your position indefinitely. The contract price is closely tied to the spot market price through a funding mechanism. This mechanism ensures that the contract price stays in line with the underlying asset's market price. Perpetual contracts are popular among traders who want to profit from short-term price movements in the cryptocurrency market.
  656

  164