How do perpetual futures contracts function within the realm of cryptocurrency trading?

1 answers

• Dec 18, 2021 · 3 years ago
  Perpetual futures contracts are a popular trading instrument in the cryptocurrency market. They are offered by various exchanges, including BYDFi. These contracts allow traders to speculate on the price movements of cryptocurrencies without actually owning the underlying asset. Traders can go long or short these contracts, depending on their market expectations. The contracts are settled in cash and their prices are closely tied to the spot price of the cryptocurrency. One of the key advantages of perpetual futures contracts is the ability to trade with leverage, which can amplify potential profits. However, it's important to note that trading with leverage also increases the risk of losses. Traders should carefully consider their risk tolerance and use proper risk management strategies when trading perpetual futures contracts.
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