What are perpetual futures?
Perpetual futures are a popular type of financial derivative widely used in cryptocurrency markets.
Unlike traditional futures contracts, perpetual futures have no expiry date, allowing traders to hold positions indefinitely and close them at any time.
In simple terms, perpetual futures are contracts that aren't settled on a specific date. Traders can increase, reduce, or close positions freely based on market conditions. This flexibility makes them ideal for both short-term strategies and long-term market exposure.
Perpetual futures suit not only short-term speculators but also risk-hedging investors.
For example, If you hold a large amount of Bitcoin and expect a short-term price drop, you could open a short position in Bitcoin perpetual futures. This way, even if Bitcoin’s spot price falls, profits from your short position can offset losses in your spot holdings, helping protect your portfolio.
In summary, perpetual futures are a vital tool for crypto investors offering flexibility and strategic versatility. However, with high volatility and leverage, strong risk management is essential.
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Happy Trading,
The WEEX Team
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