How does BitMEX perpetual futures differ from traditional futures?

6 answers

• Dec 28, 2021 · 3 years ago
  BitMEX perpetual futures and traditional futures have some key differences. Perpetual futures contracts on BitMEX do not have an expiration date, unlike traditional futures contracts which have a fixed expiration date. This means that traders can hold BitMEX perpetual futures indefinitely, as long as they meet the margin requirements. On the other hand, traditional futures contracts have a fixed expiration date, after which the contract settles. Additionally, BitMEX perpetual futures use a funding rate mechanism to maintain the price of the contract in line with the underlying asset. This funding rate is paid between long and short positions every 8 hours, ensuring that the contract price closely tracks the spot price. Traditional futures contracts, on the other hand, may have different mechanisms for price maintenance, such as daily settlement or mark-to-market.
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• Dec 28, 2021 · 3 years ago
  When it comes to leverage, BitMEX perpetual futures offer higher leverage compared to traditional futures. BitMEX allows traders to use up to 100x leverage on perpetual futures contracts, while traditional futures typically have lower leverage limits. This higher leverage on BitMEX can amplify both profits and losses, so it's important for traders to manage their risk accordingly. Traditional futures exchanges may have lower leverage limits to mitigate risk and protect traders from excessive losses. It's important to note that higher leverage also increases the liquidation risk, as positions can be liquidated if the price moves against the trader.
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• Dec 28, 2021 · 3 years ago
  BitMEX perpetual futures differ from traditional futures in terms of their trading platform. BitMEX is a popular cryptocurrency derivatives exchange known for its advanced trading features and user-friendly interface. Traders can access BitMEX's perpetual futures market 24/7, allowing them to take advantage of market opportunities at any time. BitMEX also offers a wide range of trading pairs and supports various order types, including market orders, limit orders, and stop orders. Traditional futures exchanges may have different trading hours and may offer a more limited selection of trading pairs and order types. It's important for traders to choose a platform that suits their trading needs and preferences.
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• Dec 28, 2021 · 3 years ago
  BitMEX perpetual futures are designed to cater to the needs of cryptocurrency traders who want to speculate on the price movements of digital assets. These contracts offer flexibility and convenience, allowing traders to hold positions for as long as they want without worrying about contract expiration. BitMEX's funding rate mechanism ensures that the contract price closely tracks the spot price, providing a fair and efficient trading environment. Traditional futures, on the other hand, are more commonly used by institutional investors and commodity traders to hedge against price fluctuations and manage risk. Both BitMEX perpetual futures and traditional futures serve different purposes and cater to different types of traders.
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• Dec 28, 2021 · 3 years ago
  BitMEX perpetual futures have gained popularity among cryptocurrency traders due to their unique features and advantages. These contracts provide traders with the ability to trade with high leverage, access a wide range of trading pairs, and take advantage of a funding rate mechanism that helps maintain the contract price in line with the spot price. The 24/7 availability of the BitMEX perpetual futures market also allows traders to react quickly to market movements and capitalize on trading opportunities. However, it's important for traders to understand the risks associated with trading perpetual futures, such as high leverage and the potential for liquidation. Traders should always conduct thorough research and risk management before engaging in any trading activities.
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• Dec 28, 2021 · 3 years ago
  BitMEX perpetual futures and traditional futures are both valuable tools for traders, but they have distinct differences. BitMEX perpetual futures offer more flexibility and convenience, as they do not have an expiration date and can be held indefinitely. This allows traders to take a long-term position on the price of the underlying asset. Traditional futures, on the other hand, have a fixed expiration date and are often used for short-term trading or hedging purposes. Additionally, BitMEX perpetual futures offer higher leverage compared to traditional futures, which can amplify both profits and losses. Traders should carefully consider their trading strategy and risk tolerance when choosing between BitMEX perpetual futures and traditional futures.
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