Perpetual Futures: A Guide For Traders

perpetual future: a complete guide for cryptocurrency trade

The world of cryptocurrency has exploded in recent years, with new markets and commercial platforms that emerge every day. Although traditional financial markets have been well established for decades, the increase in cryptocurrencies such as Bitcoin and Ethereum has interrupted the status quo. An area where the lines between traditional and digital assets are particularly blurred in the markets of perpetual futures.

Perpetual future, also known as perpetual contracts or perpetual swaps, are a type of derived instrument that allows merchants to buy or sell assets at any time within a specific period. These markets operate outside the traditional expiration dates, which can vary from 1 to 5 days and offer unique commercial opportunities for those familiar with cryptocurrency.

What is the perpetual future?

Perpetual futures are contracts between two parties that have agreed to exchange cash flows in an asset at a fixed price per unit. These contracts generally involve options or future, but also include a mechanism for settlement outside the traditional expiration dates. The key characteristic of perpetual future is their ability to trade continuously without interruption.

This is how it works:

• Cash flow : A merchant enters a perpetual future contract by accepting with another part (for example, a corridor) to change cash flows in an asset at a fixed price per unit.

• Expiration date : The perpetual future does not have an expiration date, which allows merchants to liquidate their contracts outside of traditional markets.

• Liquidation : The merchant receives the liquidation value of the other party or exchanges it with another asset (for example, effective).

• Benefit/Loss : The gain/loss of the operator is calculated based on the difference between the initial price and the liquidation price.

Types of perpetual futures

Perpetual futures come in several forms, which include:

• Perpetual future based on options : These involve options of options that can be exercised at any time within a specific period.

• perpetual future based on futures : These imply direct contracts on an asset without expiration date.

Commercial strategies for perpetual futures

Perpetual futures offer merchants several commercial strategies, which include:

• position dimensioning : merchants can buy and sell perpetual futures to obtain profits from price movements within a specific period.

• Next tendency : merchants use technical indicators to identify trends and perform operations accordingly.

• Rank range : Merchants seek to trade within specific ranges or channels to benefit from price movements.

Key factors to consider

Before negotiating perpetual futures, merchants should consider the following factors:

• Risk management : Perpetual future imply a high leverage, which makes risk management crucial to avoid significant losses.

• Volatility : Volatile assets and markets are more likely to experience jumps or price jumps.

• Liquidity

  

  : Perpetual future often lack liquidity compared to traditional markets.

Advantages of trade of perpetual futures

Perpetual futures offer several advantages for merchants, which include:

• Flexibility

  : Merchants can trade with a variety of assets and deadlines without restrictions.

• Scalability : The perpetual future allow operators to take advantage of large price movements with minimal capital requirements.

• Potential for high profits : With the proper management of risks, perpetual future can offer high potential gains.

Conclusion

Perpetual futures represent a new border in cryptocurrency trade, offering unique commercial opportunities and challenges. By understanding the mechanics of perpetual future and selecting the correct strategies, merchants can navigate this complex market with confidence.