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

5 answers

• Cabdiqani AbcMay 04, 2025 · 3 months ago
  Perpetuals and futures are both derivatives contracts that allow traders to speculate on the price movements of digital currencies. However, there are some key differences between the two. Perpetuals are a type of futures contract that has no expiration date, meaning they can be held indefinitely. They are designed to closely track the spot price of the underlying digital currency, using a mechanism called funding to ensure the contract's price stays in line with the spot price. Futures contracts, on the other hand, have a fixed expiration date. They are often used for short-term trading and hedging purposes. Traders can enter into futures contracts to buy or sell a specified amount of the underlying digital currency at a predetermined price and date in the future. Both perpetuals and futures offer leverage, allowing traders to amplify their potential gains or losses. However, perpetuals typically have higher leverage ratios compared to futures contracts. It's important to note that trading perpetuals and futures involves risks, and traders should carefully consider their risk tolerance and trading strategies before engaging in these markets.
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• Susan Sipocz ShanepeachesMar 11, 2025 · 5 months ago
  Perpetuals and futures are two popular trading instruments in the world of digital currencies. Perpetuals, also known as perpetual swaps, are derivative contracts that allow traders to speculate on the price movements of digital currencies without actually owning the underlying assets. They are designed to mimic the spot market and provide traders with the ability to go long or short on a digital currency. Perpetuals have no expiration date and are settled daily, meaning profits and losses are realized and settled on a daily basis. Futures contracts, on the other hand, are similar to perpetuals but have a fixed expiration date. They allow traders to buy or sell a specified amount of a digital currency at a predetermined price and date in the future. Futures contracts are often used for hedging purposes or for traders who want to take a longer-term position on a digital currency. Both perpetuals and futures offer leverage, allowing traders to amplify their potential gains or losses. However, it's important to note that leverage can also increase the risk of losses.
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• Sıla AytaçApr 08, 2025 · 4 months ago
  Perpetuals and futures are two types of derivative contracts that are commonly used in the context of digital currencies. Perpetuals, also known as perpetual swaps, are contracts that allow traders to speculate on the price movements of digital currencies without actually owning the underlying assets. These contracts have no expiration date and are settled periodically, usually every 8 hours. Perpetuals are designed to closely track the spot price of the underlying digital currency and use a funding mechanism to ensure the contract's price stays in line with the spot price. Futures contracts, on the other hand, have a fixed expiration date and are settled at the end of the contract period. They allow traders to buy or sell a specified amount of the underlying digital currency at a predetermined price and date in the future. Futures contracts are often used for hedging purposes or for traders who want to take a longer-term position on a digital currency. Both perpetuals and futures offer leverage, allowing traders to amplify their potential gains or losses. However, it's important to note that leverage can also increase the risk of losses. When trading perpetuals and futures, it's crucial to have a solid understanding of the market and to use risk management strategies to protect your capital.
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• Sıla AytaçMar 03, 2023 · 2 years ago
  Perpetuals and futures are two types of derivative contracts that are commonly used in the context of digital currencies. Perpetuals, also known as perpetual swaps, are contracts that allow traders to speculate on the price movements of digital currencies without actually owning the underlying assets. These contracts have no expiration date and are settled periodically, usually every 8 hours. Perpetuals are designed to closely track the spot price of the underlying digital currency and use a funding mechanism to ensure the contract's price stays in line with the spot price. Futures contracts, on the other hand, have a fixed expiration date and are settled at the end of the contract period. They allow traders to buy or sell a specified amount of the underlying digital currency at a predetermined price and date in the future. Futures contracts are often used for hedging purposes or for traders who want to take a longer-term position on a digital currency. Both perpetuals and futures offer leverage, allowing traders to amplify their potential gains or losses. However, it's important to note that leverage can also increase the risk of losses. When trading perpetuals and futures, it's crucial to have a solid understanding of the market and to use risk management strategies to protect your capital.
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• Hatori PJan 25, 2025 · 6 months ago
  Perpetuals and futures are both popular trading instruments in the digital currency market. Perpetuals, also known as perpetual swaps, are derivative contracts that allow traders to speculate on the price movements of digital currencies without actually owning the underlying assets. These contracts have no expiration date and are settled periodically. Perpetuals are designed to closely track the spot price of the underlying digital currency, and they use a funding mechanism to ensure the contract's price stays in line with the spot price. Futures contracts, on the other hand, have a fixed expiration date and are settled at the end of the contract period. They allow traders to buy or sell a specified amount of the underlying digital currency at a predetermined price and date in the future. Futures contracts are often used for hedging purposes or for traders who want to take a longer-term position on a digital currency. Both perpetuals and futures offer leverage, allowing traders to amplify their potential gains or losses. However, it's important to note that leverage can also increase the risk of losses. Traders should carefully consider their risk tolerance and trading strategies before engaging in perpetuals and futures trading.
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