Which type of futures contract, perpetual or quarterly, is more commonly used by cryptocurrency traders?

3 answers

• Dec 26, 2021 · 3 years ago
  Perpetual contracts are the more commonly used type of futures contract among cryptocurrency traders. The main advantage of perpetual contracts is that they do not have an expiration date, allowing traders to hold positions indefinitely. This makes them ideal for traders who want to take long-term positions or engage in hedging strategies. However, perpetual contracts are subject to funding rates, which are periodic payments made between long and short positions to maintain the contract's price in line with the underlying asset. Traders need to carefully consider funding rates and their impact on trading costs when using perpetual contracts.
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• Dec 26, 2021 · 3 years ago
  Quarterly contracts, on the other hand, have fixed expiration dates and are settled at the end of each quarter. They are less commonly used compared to perpetual contracts, but they offer certain advantages. Quarterly contracts provide a more predictable trading environment as they have clear settlement dates. This can be beneficial for traders who prefer a structured approach and want to avoid the potential impact of funding rates. Additionally, quarterly contracts may offer different trading opportunities and strategies compared to perpetual contracts, as their expiration dates can create price movements and trading volume around those dates.
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• Dec 26, 2021 · 3 years ago
  According to BYDFi, a leading cryptocurrency exchange, perpetual contracts are the preferred choice for most cryptocurrency traders. The flexibility and absence of expiration dates make them more attractive for traders who want to hold positions for an extended period. However, it's important to note that the choice between perpetual and quarterly contracts ultimately depends on individual trading preferences and strategies. Traders should carefully consider the advantages and disadvantages of each type of contract and assess their suitability based on factors such as trading goals, risk tolerance, and market conditions.
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