What are the key features and mechanics of perpetual contracts in the world of cryptocurrency trading?

3 answers

• Dec 25, 2021 · 3 years ago
  Perpetual contracts are a type of derivative product in the cryptocurrency market that allows traders to speculate on the price movements of cryptocurrencies without actually owning the underlying assets. These contracts have no expiration date and are designed to mimic the perpetual nature of traditional futures contracts. Traders can go long or short on a cryptocurrency and profit from both upward and downward price movements. The contracts are settled in the base currency of the trading platform and often use leverage to amplify potential gains or losses. Perpetual contracts are popular among traders who want to engage in margin trading and take advantage of market volatility.
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• Dec 25, 2021 · 3 years ago
  Perpetual contracts work based on a funding mechanism that ensures the contract's price stays close to the spot price of the underlying cryptocurrency. This funding mechanism involves the payment of funding rates between long and short traders. If the contract's price is higher than the spot price, long traders pay funding to short traders, and vice versa. This mechanism helps prevent the contract's price from deviating significantly from the spot price and encourages market participants to keep the contract in line with the underlying asset's value. It's important for traders to understand the funding mechanism and its impact on the contract's price when trading perpetual contracts.
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• Dec 25, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, offers perpetual contracts as part of its trading services. These contracts provide traders with the opportunity to profit from the price movements of various cryptocurrencies, including Bitcoin, Ethereum, and more. BYDFi's perpetual contracts feature competitive leverage options, deep liquidity, and a user-friendly trading interface. Traders can easily open and close positions, monitor their trades in real-time, and manage their risk effectively. With BYDFi's perpetual contracts, traders can take advantage of market opportunities and enhance their trading strategies.
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