How do perpetual futures work on the FTX platform?

3 answers

• Dec 26, 2021 · 3 years ago
  Perpetual futures on the FTX platform are a type of derivative contract that allows traders to speculate on the price of an underlying asset without actually owning it. These contracts have no expiration date, hence the term 'perpetual'. Traders can go long (buy) or short (sell) these contracts, depending on their market outlook. The FTX platform uses a funding mechanism to ensure that the perpetual futures price closely tracks the spot price of the underlying asset. This funding mechanism involves the exchange transferring funds between long and short positions to maintain balance. It's important to note that perpetual futures trading carries a high level of risk and should only be undertaken by experienced traders who fully understand the market dynamics.
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• Dec 26, 2021 · 3 years ago
  Perpetual futures on the FTX platform work by using a funding rate to maintain the contract's price in line with the underlying asset's spot price. The funding rate is a mechanism that ensures that the price of the perpetual futures contract stays close to the spot price. If the contract's price is higher than the spot price, long positions pay funding to short positions, and vice versa. This funding rate is calculated every 8 hours and is based on the difference between the contract price and the spot price. It's important to keep an eye on the funding rate when trading perpetual futures on the FTX platform, as it can have an impact on your trading strategy.
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• Dec 26, 2021 · 3 years ago
  Perpetual futures on the FTX platform are a popular trading instrument among cryptocurrency traders. They offer the ability to trade with leverage, allowing traders to amplify their potential profits or losses. The FTX platform provides up to 100x leverage on perpetual futures, which means that traders can open positions that are 100 times larger than their account balance. However, it's important to note that trading with high leverage also increases the risk of liquidation, where your position is forcibly closed due to insufficient margin. Therefore, it's crucial to manage your risk and use appropriate risk management strategies when trading perpetual futures on the FTX platform.
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