How does Kraken's perpetual futures market work?

3 answers

• Dec 16, 2021 · 3 years ago
  Kraken's perpetual futures market is a type of derivative contract that allows traders to speculate on the price movement of cryptocurrencies without actually owning the underlying assets. It is called 'perpetual' because there is no expiration date for the contract. Traders can go long (buy) or short (sell) positions based on their market predictions. The market uses a funding mechanism to ensure the contract price closely tracks the spot price of the underlying asset. This funding mechanism involves a funding rate that is periodically exchanged between long and short positions. Overall, Kraken's perpetual futures market provides traders with a way to profit from both rising and falling cryptocurrency prices.
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• Dec 16, 2021 · 3 years ago
  In Kraken's perpetual futures market, traders can use leverage to amplify their trading positions. Leverage allows traders to control a larger position with a smaller amount of capital. However, it is important to note that leverage also increases the risk of losses. Kraken offers different levels of leverage depending on the cryptocurrency being traded. Traders should carefully consider their risk tolerance and trading strategy before using leverage in the perpetual futures market.
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• Dec 16, 2021 · 3 years ago
  BYDFi, a digital asset exchange, also offers a perpetual futures market similar to Kraken's. Traders on BYDFi can enjoy the same features and benefits, such as leverage and the ability to profit from both rising and falling cryptocurrency prices. However, it's important to note that each exchange may have its own specific rules and trading conditions, so it's always a good idea to familiarize yourself with the platform's terms and conditions before trading.
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