How do perpetual futures contracts compare to quarterly futures contracts in the world of digital currencies?

3 answers

• MOHANA KRISNANOct 29, 2024 · 9 months ago
  Perpetual futures contracts and quarterly futures contracts are two popular types of derivative contracts in the digital currency market. Perpetual futures contracts have no expiry date, while quarterly futures contracts have a fixed expiry date. This means that perpetual contracts can be held indefinitely, allowing traders to maintain their positions for as long as they want. On the other hand, quarterly futures contracts expire on a specific date, which requires traders to close their positions or roll them over to the next contract. Another key difference is the funding mechanism. Perpetual contracts use a funding rate to ensure that the contract price closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every 8 hours. Quarterly futures contracts, on the other hand, do not have a funding mechanism and their prices may deviate from the spot price. Overall, perpetual futures contracts offer more flexibility and are better suited for traders who want to hold positions for an extended period of time, while quarterly futures contracts are more suitable for short-term trading strategies.
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• Sat SachanSep 26, 2020 · 5 years ago
  When it comes to perpetual futures contracts and quarterly futures contracts in the world of digital currencies, there are a few key differences to consider. Perpetual futures contracts, as the name suggests, have no expiration date. This means that traders can hold their positions for as long as they want without worrying about contract expiry. On the other hand, quarterly futures contracts have a fixed expiration date, which means that traders need to close their positions or roll them over to the next contract before the expiry date. Another difference is the funding mechanism. Perpetual futures contracts use a funding rate to ensure that the contract price closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every 8 hours. Quarterly futures contracts, on the other hand, do not have a funding mechanism and their prices may deviate from the spot price. In terms of trading strategies, perpetual futures contracts are more suitable for traders who want to hold positions for a longer period of time, while quarterly futures contracts are better suited for short-term trading strategies. It's important to consider these differences and choose the contract type that aligns with your trading goals and strategy.
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• Mcfadden MolinaOct 08, 2020 · 5 years ago
  Perpetual futures contracts and quarterly futures contracts are two popular types of derivative contracts in the digital currency market. While both types of contracts allow traders to speculate on the price movements of digital currencies, there are some key differences to be aware of. Perpetual futures contracts have no expiry date, which means that traders can hold their positions for as long as they want. This provides more flexibility and eliminates the need to constantly roll over contracts. On the other hand, quarterly futures contracts have a fixed expiry date, which requires traders to close their positions or roll them over to the next contract before the expiry date. Another difference is the funding mechanism. Perpetual contracts use a funding rate to ensure that the contract price closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every 8 hours. Quarterly futures contracts, on the other hand, do not have a funding mechanism and their prices may deviate from the spot price. In terms of trading strategies, perpetual futures contracts are more suitable for long-term positions, while quarterly futures contracts are better suited for short-term trading strategies. It's important to carefully consider these differences and choose the contract type that aligns with your trading goals and risk tolerance.
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