PERPETUAL FUTURES CONTRACTS AND HOW THEY DIFFER FROM SPOT TRADING

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27 Sept 2022
28

With a new experience into crypto investment, your first approach will be spot trading, because it offers a simply way to invest and trade underlying assets immediately. Spot trading usually works when investors practice HOLDings. What about a trading system that you can hedge and leverage your positions by trading without predetermined expiry date? Yes, that is where Perpetual Futures Contracts exist.
    Perpetual Futures Contracts are the complex model of conventional futures contracts, with no expiry date to which traders can leverage up without exchanging their underlying assets on the spot. They are non-expiry contracts, supported through a funding mechanism. Their common characteristics are but not limited to, absence of expiry date, mark price, dual price mechanism, 10x-100x L.R and above, auto deleveraging etc.
Unlike spot trading, perpetual futures contracts do not have fixed expiry and settlement time. Moreover, they also amplify potential losses than spot trading.

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