How do perpetual swaps differ from futures in the context of digital currencies?

5 answers

• Pope RiggsJan 03, 2025 · 7 months ago
  Perpetual swaps and futures are both derivative financial instruments used in the context of digital currencies. However, there are some key differences between the two. Perpetual swaps are a type of derivative contract that allows traders to speculate on the price movements of digital currencies without actually owning the underlying asset. They have no expiration date and can be held indefinitely. On the other hand, futures contracts have a specified expiration date and require the physical delivery of the underlying asset at that date. Perpetual swaps also have a funding mechanism that helps to keep the contract's price closely aligned with the spot price of the digital currency, while futures contracts do not have this feature. Overall, perpetual swaps offer more flexibility and are better suited for short-term trading strategies, while futures contracts are more suitable for longer-term hedging or investment purposes.
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• Faadi KoerierNov 19, 2021 · 4 years ago
  Perpetual swaps and futures are two popular trading instruments in the digital currency market. While they both allow traders to speculate on the price movements of digital currencies, there are some key differences between them. Perpetual swaps are designed to mimic the trading experience of spot trading, as they have no expiration date and can be held indefinitely. They also have a funding mechanism that helps to keep the contract's price in line with the spot price. On the other hand, futures contracts have a fixed expiration date and require the physical delivery of the underlying asset. This makes them more suitable for hedging or longer-term investment strategies. In terms of trading fees, perpetual swaps often have lower fees compared to futures contracts. Traders should consider their trading goals and risk tolerance when choosing between perpetual swaps and futures.
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• Moniruzzaman ShamimNov 12, 2020 · 5 years ago
  Perpetual swaps and futures are two different types of derivative contracts used in the digital currency market. Perpetual swaps are similar to futures contracts in that they allow traders to speculate on the price movements of digital currencies without actually owning the underlying asset. However, there are some key differences. Perpetual swaps have no expiration date, which means they can be held indefinitely. They also have a funding mechanism that helps to keep the contract's price in line with the spot price. On the other hand, futures contracts have a fixed expiration date and require the physical delivery of the underlying asset. This makes them more suitable for longer-term hedging or investment strategies. When it comes to trading volume, perpetual swaps often have higher liquidity compared to futures contracts, which can be beneficial for traders. Overall, both perpetual swaps and futures have their own advantages and it's important for traders to understand their differences before deciding which one to trade.
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• Ingram KragelundOct 31, 2022 · 3 years ago
  Perpetual swaps and futures are two types of derivative contracts used in the digital currency market. Perpetual swaps are similar to futures contracts in that they allow traders to speculate on the price movements of digital currencies. However, there are some key differences between the two. Perpetual swaps have no expiration date and can be held indefinitely, while futures contracts have a specified expiration date. Perpetual swaps also have a funding mechanism that helps to keep the contract's price closely aligned with the spot price of the digital currency, while futures contracts do not have this feature. In terms of trading fees, perpetual swaps often have lower fees compared to futures contracts. Traders should consider their trading goals and risk tolerance when choosing between perpetual swaps and futures.
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• Musawer SeeratJul 08, 2025 · 12 days ago
  Perpetual swaps and futures are two different types of derivative contracts used in the digital currency market. Perpetual swaps are a popular choice among traders due to their flexibility and lack of expiration date. They allow traders to speculate on the price movements of digital currencies without actually owning the underlying asset. On the other hand, futures contracts have a fixed expiration date and require the physical delivery of the underlying asset. This makes them more suitable for longer-term hedging or investment strategies. Perpetual swaps also have a funding mechanism that helps to keep the contract's price in line with the spot price, which can be advantageous for traders. Overall, both perpetual swaps and futures have their own unique features and it's important for traders to understand the differences between them before deciding which one to trade.
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