How does Binance perpetual futures differ from traditional futures trading?

3 answers

• SEliacinAug 01, 2021 · 4 years ago
  Binance perpetual futures differ from traditional futures trading in several ways. Firstly, Binance perpetual futures do not have an expiration date, allowing traders to hold their positions indefinitely. This is in contrast to traditional futures contracts, which have a fixed expiration date. Secondly, Binance perpetual futures use a funding rate mechanism to ensure that the perpetual futures price closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions in the market, helping to maintain price stability. Finally, Binance perpetual futures offer higher leverage options compared to traditional futures trading, allowing traders to amplify their potential profits or losses. Overall, Binance perpetual futures provide more flexibility, price stability, and leverage options for traders in the cryptocurrency market.
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• Ahmet Ata ÖzdemirJul 17, 2020 · 5 years ago
  When it comes to Binance perpetual futures, it's important to understand that they are a type of derivative contract that allows traders to speculate on the price movements of cryptocurrencies without actually owning the underlying assets. Traditional futures trading, on the other hand, involves buying or selling contracts that represent a specific quantity of a particular asset at a predetermined price and future date. While both Binance perpetual futures and traditional futures trading involve leverage and the potential for significant profits or losses, Binance perpetual futures offer unique advantages such as no expiration date and a funding rate mechanism that helps maintain price stability.
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• saeid sobhani ghahramanloo saeNov 01, 2024 · 9 months ago
  Binance perpetual futures differ from traditional futures trading in a few key ways. Firstly, Binance perpetual futures do not have an expiration date, which means traders can hold their positions for as long as they want. This is different from traditional futures contracts, which have a fixed expiration date. Secondly, Binance perpetual futures use a funding rate mechanism to ensure that the perpetual futures price closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions in the market, helping to keep the price in line with the spot price. Finally, Binance perpetual futures offer higher leverage options compared to traditional futures trading, allowing traders to amplify their potential profits or losses. Overall, Binance perpetual futures provide more flexibility and trading opportunities for cryptocurrency traders.
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