What are the differences between perpetual futures trading and traditional futures trading in the digital currency space?

3 answers

• Farah PolatJan 27, 2023 · 2 years ago
  Perpetual futures trading and traditional futures trading in the digital currency space have several key differences. Perpetual futures contracts do not have an expiration date, while traditional futures contracts have a fixed expiration date. This means that perpetual futures contracts can be held indefinitely, allowing traders to maintain positions for as long as they want. In terms of funding rates, perpetual futures contracts use a funding mechanism to ensure that the contract price closely tracks the spot price of the underlying digital currency. This funding mechanism involves periodic payments between long and short positions. Traditional futures contracts, on the other hand, do not have a funding mechanism and are settled at the expiration date. As for trading strategies, perpetual futures trading allows traders to take advantage of both long and short positions, enabling them to profit in both rising and falling markets. Traditional futures trading, on the other hand, is more commonly used for hedging purposes or for speculating on the price direction of the underlying asset. Overall, perpetual futures trading offers more flexibility and trading opportunities compared to traditional futures trading.
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• Poiu UiopMay 20, 2025 · 2 months ago
  Perpetual futures trading and traditional futures trading in the digital currency space have some key differences. Perpetual futures contracts are designed to mimic the spot market, as they do not have an expiration date. This means that traders can hold their positions for as long as they want without worrying about contract expiration. Traditional futures contracts, on the other hand, have a fixed expiration date, which means that traders need to close their positions before the expiration date. In terms of funding rates, perpetual futures contracts use a funding mechanism to ensure that the contract price closely tracks the spot price of the underlying digital currency. This funding mechanism involves the payment of funding rates between long and short positions. Traditional futures contracts, on the other hand, do not have a funding mechanism. When it comes to trading strategies, perpetual futures trading allows traders to take advantage of both long and short positions, enabling them to profit in both bullish and bearish markets. Traditional futures trading, on the other hand, is more commonly used for hedging purposes or for speculating on the price direction of the underlying asset. Overall, perpetual futures trading offers more flexibility and opportunities for traders in the digital currency space.
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• Alberto MartinezJun 06, 2021 · 4 years ago
  Perpetual futures trading and traditional futures trading in the digital currency space have distinct differences. Perpetual futures contracts are perpetual in nature, meaning they do not have an expiration date. This allows traders to hold their positions for as long as they want. On the other hand, traditional futures contracts have a fixed expiration date, which requires traders to close their positions before the expiration date. In terms of funding rates, perpetual futures contracts use a funding mechanism to ensure that the contract price closely tracks the spot price of the underlying digital currency. This funding mechanism involves the payment of funding rates between long and short positions. Traditional futures contracts, however, do not have a funding mechanism. When it comes to trading strategies, perpetual futures trading allows traders to take advantage of both long and short positions, allowing them to profit in both bullish and bearish markets. Traditional futures trading, on the other hand, is more commonly used for hedging purposes or for speculating on the price direction of the underlying asset. Overall, perpetual futures trading offers more flexibility and opportunities for traders in the digital currency space.
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