What is the concept of perpetual futures in the world of digital currencies?

3 answers

• Nicolas EymaelFeb 23, 2025 · 5 months ago
  Perpetual futures are a type of derivative contract in the world of digital currencies. They are similar to traditional futures contracts, but with some key differences. Unlike traditional futures contracts that have an expiration date, perpetual futures do not have a fixed expiry date. This means that they can be held indefinitely, hence the term 'perpetual'. Perpetual futures also have a funding mechanism that helps to keep the contract's price in line with the underlying asset's price. This funding mechanism ensures that the contract's price closely tracks the spot price of the digital currency, reducing the risk of price manipulation. Additionally, perpetual futures often use a funding rate to incentivize traders to keep the contract's price in line with the spot price. Overall, perpetual futures provide traders with a way to speculate on the price of digital currencies without the need to physically own the underlying asset.
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• Christoph ReckingerDec 20, 2021 · 4 years ago
  Perpetual futures are like regular futures contracts, but without an expiration date. They are a popular trading instrument in the world of digital currencies because they allow traders to speculate on the price of cryptocurrencies without actually owning them. Unlike traditional futures contracts, perpetual futures do not require physical delivery of the underlying asset. Instead, they use a funding mechanism to keep the contract's price in line with the spot price of the digital currency. This funding mechanism ensures that the contract's price closely tracks the underlying asset's price, reducing the risk of price manipulation. Perpetual futures also often offer leverage, allowing traders to amplify their potential profits or losses. However, it's important to note that trading perpetual futures can be highly risky due to the volatile nature of digital currencies.
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• MaazOct 29, 2024 · 9 months ago
  Perpetual futures are a type of derivative contract that allows traders to speculate on the price of digital currencies. They are similar to traditional futures contracts, but with some key differences. Unlike traditional futures contracts that have a fixed expiry date, perpetual futures do not expire. This means that traders can hold their positions for as long as they want. Perpetual futures also have a funding mechanism that helps to keep the contract's price in line with the spot price of the digital currency. This funding mechanism ensures that the contract's price closely tracks the underlying asset's price, reducing the risk of price manipulation. Perpetual futures are popular among traders who want to profit from the price movements of digital currencies without actually owning them. However, it's important to understand the risks involved and to have a solid trading strategy in place.
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