How do perpetual swaps and futures work in the context of digital currencies?

3 answers

• Salma ElmaghawryJul 08, 2024 · a year ago
  Perpetual swaps and futures are both derivatives contracts that allow traders to speculate on the price movements of digital currencies without owning the underlying assets. In a perpetual swap, traders can go long or short on a digital currency and profit from price fluctuations. The contract has no expiration date and is designed to mimic the spot market. On the other hand, futures contracts have a specified expiration date and require the delivery of the underlying asset at that time. Both perpetual swaps and futures provide leverage, allowing traders to amplify their potential profits or losses. These instruments are popular among traders who want to hedge their positions or engage in speculative trading.
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• Fabio03Mar 31, 2023 · 2 years ago
  Perpetual swaps and futures are like the turbocharged versions of traditional spot trading. With perpetual swaps, traders can enjoy the benefits of spot trading, such as 24/7 trading and no need for physical delivery, while also leveraging their positions. Futures, on the other hand, offer a more structured approach with fixed expiration dates and standardized contract sizes. Both instruments provide opportunities for traders to profit from the volatility of digital currencies, but they also come with risks. It's important to understand the mechanics and risks involved before diving into trading perpetual swaps and futures.
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• Brock McCallumNov 28, 2023 · 2 years ago
  Perpetual swaps and futures are powerful tools for traders to manage their exposure to digital currencies. With perpetual swaps, traders can open long or short positions without worrying about contract expiration. This flexibility allows traders to hold positions for as long as they want, making it ideal for hedging or long-term trading strategies. Futures, on the other hand, provide a more structured approach with fixed expiration dates, which can be useful for short-term trading or hedging against price fluctuations. Both instruments have their own advantages and it's important for traders to choose the one that aligns with their trading goals and risk tolerance.
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