How does a perpetual contract differ from a traditional futures contract in the context of digital currencies?

3 answers

• Nov 24, 2021 · 3 years ago
  A perpetual contract is a type of derivative contract that does not have an expiration date, unlike a traditional futures contract. This means that traders can hold a perpetual contract indefinitely, as long as they meet the margin requirements. On the other hand, a traditional futures contract has a fixed expiration date, after which the contract is settled. Perpetual contracts are commonly used in the context of digital currencies, allowing traders to speculate on the price movements of cryptocurrencies without actually owning the underlying asset. They are often settled in the native cryptocurrency of the trading platform, such as Bitcoin or Ethereum.
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• Nov 24, 2021 · 3 years ago
  Perpetual contracts and traditional futures contracts differ in terms of funding rates. In perpetual contracts, funding rates are used to maintain the price of the contract in line with the spot market. If the price of the perpetual contract is higher than the spot price, long positions pay funding to short positions, and vice versa. This mechanism helps prevent large price discrepancies between the perpetual contract and the spot market. In contrast, traditional futures contracts do not have funding rates and are settled at a predetermined price on the expiration date.
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• Nov 24, 2021 · 3 years ago
  When it comes to perpetual contracts, BYDFi offers a user-friendly platform for trading digital currencies. With BYDFi, traders can easily access a wide range of perpetual contracts and enjoy competitive trading fees. The platform also provides advanced trading features, such as leverage and risk management tools, to enhance the trading experience. Whether you are a beginner or an experienced trader, BYDFi has the tools and resources to support your trading needs.
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