How does the perpetual contract work in the BTC futures market?

3 answers

• Furqan ChohdaryFeb 11, 2024 · a year ago
  The perpetual contract in the BTC futures market is a type of derivative contract that allows traders to speculate on the price of Bitcoin without actually owning the underlying asset. Unlike traditional futures contracts, which have an expiration date, perpetual contracts do not have a fixed expiry. They are designed to mimic the spot market by using a funding mechanism to ensure the contract price closely tracks the underlying asset price. Traders can go long or short on the perpetual contract, profiting from both rising and falling prices. The contract is settled in the native cryptocurrency of the exchange, usually Bitcoin, and traders can use leverage to amplify their positions. It's important to note that perpetual contracts carry higher risks due to the use of leverage and the absence of an expiration date, so traders should exercise caution and manage their risk accordingly.
  895

  448
• Prashant SinghSep 12, 2021 · 4 years ago
  The perpetual contract in the BTC futures market is like a never-ending futures contract. It allows traders to speculate on the price of Bitcoin without actually owning it. Unlike traditional futures contracts that have a fixed expiration date, perpetual contracts don't expire. They are designed to track the spot price of Bitcoin by using a funding mechanism. Traders can go long (betting on price increase) or short (betting on price decrease) on the perpetual contract. It offers traders the opportunity to profit from both rising and falling markets. However, it's important to understand that trading perpetual contracts involves higher risks due to leverage and the absence of an expiration date. Traders should carefully manage their positions and use risk management strategies to protect their capital.
  812

  271
• Shea ThomsonJan 29, 2025 · 6 months ago
  The perpetual contract in the BTC futures market is an innovative financial instrument that allows traders to speculate on the price of Bitcoin without actually owning it. Unlike traditional futures contracts, which have a fixed expiration date, perpetual contracts are designed to never expire. They are settled in the native cryptocurrency of the exchange, usually Bitcoin. Traders can go long or short on the perpetual contract, depending on their market outlook. The contract price closely tracks the underlying asset price through a funding mechanism. This allows traders to profit from both upward and downward price movements. However, it's important to note that trading perpetual contracts carries higher risks due to the use of leverage and the absence of an expiration date. Traders should carefully consider their risk tolerance and use appropriate risk management strategies.
  888

  222