What are the differences between standard futures and perpetual futures in the world of cryptocurrency?

3 answers

• Byrd HendricksJul 30, 2022 · 3 years ago
  Standard futures and perpetual futures are both types of futures contracts in the world of cryptocurrency. However, there are some key differences between them. Standard futures have a fixed expiration date, while perpetual futures do not. Perpetual futures contracts are designed to mimic the spot market, allowing traders to hold positions indefinitely. On the other hand, standard futures contracts have a set expiration date, after which the contract is settled. Another difference is the funding mechanism. Perpetual futures contracts use a funding rate to ensure the contract's price stays close to the underlying asset's price. This funding rate is exchanged between long and short positions every few hours. Standard futures contracts, on the other hand, do not have a funding mechanism. Instead, they rely on the market forces of supply and demand to determine the contract's price. Overall, the main differences between standard futures and perpetual futures lie in their expiration dates and funding mechanisms.
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• Ion CiocaAug 22, 2024 · a year ago
  When it comes to standard futures and perpetual futures in the world of cryptocurrency, the main difference lies in their expiration dates. Standard futures contracts have a fixed expiration date, usually on a specific date in the future. Once the expiration date is reached, the contract is settled, and the parties involved either take delivery of the underlying asset or settle the contract in cash. On the other hand, perpetual futures contracts do not have an expiration date. They are designed to mimic the spot market, allowing traders to hold positions indefinitely. This means that perpetual futures contracts can be held for as long as the trader wants, without the need to worry about expiration dates. Another difference between the two is the funding mechanism. Perpetual futures contracts use a funding rate to ensure that the contract's price stays close to the underlying asset's price. This funding rate is exchanged between long and short positions every few hours. Standard futures contracts, on the other hand, do not have a funding mechanism and rely solely on the market forces of supply and demand to determine the contract's price.
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• Inu Rengga ErlanggaMay 12, 2024 · a year ago
  Standard futures and perpetual futures are two types of futures contracts commonly used in the world of cryptocurrency. While both types of contracts allow traders to speculate on the future price of an underlying asset, there are some key differences between them. Standard futures contracts have a fixed expiration date, usually ranging from a few days to several months. Once the expiration date is reached, the contract is settled, and the parties involved either take delivery of the underlying asset or settle the contract in cash. Perpetual futures contracts, on the other hand, do not have an expiration date. They are designed to track the price of the underlying asset closely, allowing traders to hold positions indefinitely. Another difference is the funding mechanism. Perpetual futures contracts use a funding rate to ensure that the contract's price stays close to the underlying asset's price. This funding rate is exchanged between long and short positions every few hours. Standard futures contracts, however, do not have a funding mechanism and rely on the market forces of supply and demand to determine the contract's price. Overall, the key differences between standard futures and perpetual futures lie in their expiration dates and funding mechanisms, making them suitable for different trading strategies and preferences.
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