What is the definition of perpetual futures in the context of cryptocurrency?

1 answers

• Jan 02, 2022 · 3 years ago
  Perpetual futures, also known as perpetual swaps, are a type of derivative contract commonly used in the cryptocurrency market. They are designed to track the price of the underlying cryptocurrency and provide traders with the ability to speculate on its future price movements. Perpetual futures contracts do not have an expiration date, which means they can be held indefinitely. They are settled periodically, usually every few hours, based on the difference between the contract price and the spot price of the cryptocurrency at the time of settlement. Perpetual futures are popular among traders because they offer leverage, allowing traders to amplify their potential profits. However, it's important to note that leverage also increases the risk of losses. It's always recommended to thoroughly understand the risks involved and use appropriate risk management strategies when trading perpetual futures.
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