Perpetual Futures: A Guide For Traders
Futures Perpetui: a complete guide for cryptocurrency traders
The world of cryptocurrency trade is a highly volatile and rapidly evolving landscape, with new opportunities that emerge every day. A class of activity that has acquired significant attention in recent years is the trading of perpetual Futures. In this article, we will deepen the concept of trading for perpetual futures, its benefits, risks and the way in which it can be used by cryptocurrency traders.
What are the future perpetual?
The future perpetual, also known as perpetual contracts or perpetual options, are a type of financial derivative that allows traders to bet on the future price of an activity without any expiration date. Unlike traditional options, which have an expiration date and must be exercised within a certain period of time, future perpetual perpetual give the traders control over the position indefinitely.
How does the trading for perpetual futures work?
In perpetual Futures Trading, a trader enters into a contract with a (long) buyer or a (short) seller of an asset of cryptocurrency, accepting to buy or sell the activity at a price specified at a future date. The contract is generally structured as follows:
* Below activity: The basic cryptocurrency resource that will be exchanged.
* Operating price: The predetermined price to which the trader will close his position.
* Time-in-Force (TIF): The amount of time in which a buyer or seller must fulfill his obligations. Tif generally varies from 3 to 30 seconds, allowing traders to respond quickly to market developments.
* Notal dimension: The total value of the contract, usually expressed in units of the activity below.
When a trader enters a contract for perpetual futures, they are essentially betting on the movement of their selected cryptocurrency. If the market moves against them and the operating price drops below the current market price, the trader will be obliged to buy or sell at the operating price. On the contrary, if the market moves in their favor and the operating price rises above the current market price, the trader will be forced to sell or buy.
Advantages of Perpetual Futures Trading for cryptocurrency trader
Trading for perpetual futures offers several advantages that make it an interesting option for cryptocurrency traders:
* Leva: Using future perpetual, traders can amplify their returns with a minimum risk. The lever factor is generally higher than traditional options and cryptocurrencies, allowing traders to control larger positions with less capital.
* At low risk: The trading of Futures Perpetui eliminates the need for margin calls or risks of liquidity associated with traditional options.
* Mercato surveillance: operators can monitor market activity and quickly adapt their position in response to the changes in the underlying property price.
* Scalability: The future perpetual allow traders to exchange larger volumes at lower costs, making it an ideal choice for speculative traders.
Risks of trading for future perpetual for cryptocurrency trader
While trading for perpetual futures offers several advantages, there are also risks associated with this market:
* Mercato volatility: The cryptocurrency market is known for its high volatility, which can lead to rapid prices of prices and large losses.
* Risk of liquidity: contracts for perpetual futures often have a low liquidity, making it difficult to enter or quickly come out of positions. This can increase the time necessary to close a position and involve significant losses if the market conditions deteriorate.
* Risk of counterparty: Operators are exposed to the risk of counterparty when negotiating with other parts on perpetual peak platforms. If one part is defaulting, the other may not be able to fulfill their obligations or compensate for losses.