What are perpetual futures contracts?
A perpetual contract is a type of futures contract that does not have a fixed execution time. This means that you can leave your position open for as long as you want.
In addition, our exchange has a mechanism that aims to keep the prices on the futures market as close as possible to the spot market prices, which distinguishes it from traditional futures contracts. It is also worth considering that our exchange uses only perpetual futures contracts.
Funding rate is the coefficient of difference between the spot market and the futures market. The main difference between the two is that in the futures market, users pay each other a fee for the use of borrowed funds, unlike in the spot market, where the fee is paid to the exchange. This rate can be either positive or negative, depending on the current market situation.
How do perpetual futures contracts work?
Perpetual futures contracts are similar to our current margin trading mechanics. You can open both Long and Short positions and use leverage. Depending on the market direction you choose and the current market situation, you can either pay or receive a funding rate. You can read more about what positions are and how they differ in this article.
When the market is rising, the funding rate is positive, which means that users with open Long positions pay a borrowing fee to users with open Short positions. When the market is falling, the situation is reversed.
Funding is calculated automatically every 8 hours for all active positions, and the trading page also always displays a countdown to the time of charging.
It is important to understand that when buying a futures contract, you are not buying the actual asset, as a futures contract is an agreement between the parties on the future purchase or sale of an asset at a predetermined price at a certain point in the future.
The current estimated financing value and the time until the next accrual can be seen on the futures contract trading page, above the chart. The history of previous accruals is also available for viewing in the Funding history section.
What are the benefits of trading futures?
On our exchange, the commissions for futures trading are significantly lower than on the spot market.
High income potential.
Futures allow use of leverage, and on our exchange you can set leverage up to 100x. This gives you the opportunity to access an asset by contributing just a part of its value.
Futures contracts are great for protecting your trading portfolio. For example, you can buy $5000 worth of an asset expecting it to rise and still open a short position for only $500, using leverage of 10x to protect yourself. This allows you to risk only $500 on futures and protect your portfolio from potential losses. You can also make money on price swings both ways.
Flexibility of trading strategies.
You can make money even on a market fall by securing your portfolio with small amounts and capitalising on small price variations thanks to leverage.
What questions come up most often?
If a position is opened and closed before the end of the funding accrual time, will it be accrued?
No, in this case, funding will not be accrued. To receive funding, you must wait for the end of the accrual time, which occurs every 8 hours and is displayed on the trading page above the chart, as well as in the Funding history.
What does “PERP” mean in futures contracts?
PERP is an abbreviation for “perpetual” and indicates that this contract is open-ended and has no fixed term of completion.
What leverage is available for futures contracts?
Leverage available for trading futures contracts is 1x, 2x, 3x, 5x, 10x, 20x, 50x, 100x.
What is normalization?
Normalization is the process of automatically converting assets. It can happen to an asset you have on your balance when trading with another asset in a pair. For example, you have ETH on your collateral balance, and you want to open a BTC-PERP position. In this case, normalization will take place when you close the position.
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