What are the advantages and disadvantages of trading perpetuals compared to traditional futures contracts in the cryptocurrency market?

1 answers

• Mar 22, 2022 · 3 years ago
  Trading perpetuals compared to traditional futures contracts in the cryptocurrency market has its own set of advantages and disadvantages. One advantage of perpetuals is that they offer more flexibility in terms of holding positions for longer periods without worrying about contract expiration. This can be beneficial for traders who prefer a longer-term approach. Additionally, perpetuals often have higher liquidity, making it easier for traders to enter and exit positions. However, perpetuals also have some disadvantages. They are subject to funding rates, which can result in additional costs for traders. Moreover, perpetuals may experience funding rate fluctuations, which can introduce additional risks and volatility. It's important for traders to carefully consider these factors and choose the contract type that aligns with their trading strategy and risk tolerance.
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