What is the difference between deribit perpetual futures and traditional futures?

3 answers

• Kaphi AssumiJan 31, 2025 · 6 months ago
  Deribit perpetual futures and traditional futures are both popular trading instruments in the cryptocurrency market. However, there are several key differences between them. Firstly, deribit perpetual futures do not have an expiration date, allowing traders to hold their positions indefinitely. On the other hand, traditional futures contracts have a fixed expiration date, after which the contract is settled. This difference in expiration dates affects the trading strategies and risk management approaches for these two types of futures. Another difference is the funding mechanism. Deribit perpetual futures use a funding rate to maintain the fair value of the contract in line with the underlying asset. This funding rate is exchanged between long and short positions every 8 hours. In contrast, traditional futures contracts do not have a funding mechanism and are settled at the expiration date based on the prevailing market price. Additionally, deribit perpetual futures often have higher leverage options compared to traditional futures. This allows traders to amplify their potential profits or losses. However, higher leverage also increases the risk involved in trading. Overall, deribit perpetual futures offer more flexibility in terms of expiration dates and funding mechanisms, while traditional futures have a more straightforward settlement process. Traders should carefully consider their trading strategies and risk tolerance when choosing between the two types of futures.
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• Peter MikhaeilFeb 29, 2024 · a year ago
  Deribit perpetual futures and traditional futures are two different types of contracts used in the cryptocurrency market. Deribit perpetual futures are designed to mimic the behavior of spot markets, allowing traders to hold positions indefinitely without the need for contract expiration. This makes them suitable for traders who want to maintain exposure to the underlying asset for an extended period of time. On the other hand, traditional futures contracts have a fixed expiration date, which means that traders need to roll over their positions or settle them before the expiration date. In terms of trading mechanics, deribit perpetual futures use a funding mechanism to ensure that the contract price closely tracks the spot price of the underlying asset. This funding mechanism involves the exchange of funding payments between long and short positions. Traditional futures, on the other hand, are settled at the expiration date based on the prevailing market price. It's important to note that both deribit perpetual futures and traditional futures have their own advantages and disadvantages. Traders should carefully consider their trading strategies, risk tolerance, and market conditions before choosing which type of futures contract to trade.
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• Best McClureNov 10, 2024 · 8 months ago
  Deribit perpetual futures and traditional futures are two popular types of futures contracts in the cryptocurrency market. While both offer exposure to the price movements of underlying assets, there are some key differences between them. Deribit perpetual futures are unique in that they do not have an expiration date. This means that traders can hold their positions indefinitely, providing them with more flexibility in managing their trades. On the other hand, traditional futures contracts have a fixed expiration date, after which the contract is settled. Another difference is the funding mechanism used in deribit perpetual futures. These contracts employ a funding rate that is exchanged between long and short positions every 8 hours. This mechanism helps to keep the contract price in line with the underlying asset's spot price. Traditional futures contracts, on the other hand, do not have a funding mechanism and are settled at the expiration date based on the prevailing market price. In terms of leverage, deribit perpetual futures often offer higher leverage options compared to traditional futures. This allows traders to amplify their potential profits or losses. However, it's important to note that higher leverage also increases the risk involved in trading. In summary, deribit perpetual futures and traditional futures differ in terms of expiration dates, funding mechanisms, and leverage options. Traders should carefully consider these factors and their own trading strategies before choosing which type of futures contract to trade.
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