What is the concept of perpetual futures in the crypto market?

3 answers

• Dr. Farnoosh HajihaAug 29, 2024 · a year ago
  Perpetual futures are a type of derivative contract in the cryptocurrency market that allows traders to speculate on the price of an underlying asset without actually owning it. Unlike traditional futures contracts, perpetual futures do not have an expiration date, which means they can be held indefinitely. They are designed to track the price of the underlying asset closely, using a funding mechanism to ensure the contract's price aligns with the spot market. This funding mechanism helps prevent the contract from deviating too much from the spot price and provides incentives for traders to keep the contract's price in line with the market.
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• NirupamJan 26, 2023 · 2 years ago
  Perpetual futures are like regular futures contracts, but with some key differences. They are perpetual, meaning they don't have an expiration date. This allows traders to hold their positions for as long as they want. Additionally, perpetual futures use a funding mechanism to keep the contract's price in line with the spot market. This mechanism ensures that the contract's price closely tracks the price of the underlying asset. It also provides opportunities for traders to earn funding payments if they hold a position in the contract that is in the minority. Overall, perpetual futures offer flexibility and the ability to profit from both rising and falling markets.
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• ADHITHYA VEERAMALAI MANICKAM CSep 05, 2021 · 4 years ago
  Perpetual futures are an innovative financial instrument in the cryptocurrency market. They are similar to traditional futures contracts but have some unique features. One of the key differences is that perpetual futures do not have an expiration date, allowing traders to hold their positions indefinitely. This makes them ideal for long-term strategies or hedging against price fluctuations. Perpetual futures also use a funding mechanism to ensure the contract's price aligns with the spot market. This mechanism helps maintain the contract's stability and prevents it from deviating too much from the underlying asset's price. BYDFi, a leading cryptocurrency exchange, offers perpetual futures trading with competitive fees and a user-friendly interface.
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