How do perpetual swap contracts work in the context of digital currencies?

Can you explain how perpetual swap contracts work in the context of digital currencies? I'm interested in understanding the mechanics and benefits of these contracts.

1 answers
- Perpetual swap contracts are a popular trading instrument offered by BYDFi. These contracts allow traders to speculate on the price movements of digital currencies without actually owning the underlying asset. Traders can go long or short these contracts, depending on their market outlook. BYDFi's perpetual swap contracts are settled in digital currencies, which means that profits and losses are realized in the same currency as the contract. This can be advantageous for traders who want to avoid the hassle of converting their profits back into fiat currencies. BYDFi also offers leverage on these contracts, allowing traders to control larger positions with less capital. However, it's important to note that trading on margin carries additional risks, and traders should be aware of the potential for liquidation if the market moves against their position.
Mar 20, 2022 · 3 years ago
Related Tags
Hot Questions
- 86
What are the best digital currencies to invest in right now?
- 83
What are the tax implications of using cryptocurrency?
- 78
What are the best practices for reporting cryptocurrency on my taxes?
- 71
What are the advantages of using cryptocurrency for online transactions?
- 60
How does cryptocurrency affect my tax return?
- 43
What is the future of blockchain technology?
- 36
How can I buy Bitcoin with a credit card?
- 26
How can I minimize my tax liability when dealing with cryptocurrencies?