Solution Guide for Perpetual Futures Trading
Perpetual futures trading has quickly become one of the most popular tools in modern financial markets, especially in cryptocurrency and derivatives trading. Unlike traditional futures contracts, perpetual futures have no expiration date, allowing traders to maintain positions indefinitely as long as they meet margin requirements. This solution guide for perpetual futures trading will provide in-depth strategies, risk management approaches, and real-world insights, making it an essential reference for retail and professional traders alike.
Understanding Perpetual Futures Trading
What are Perpetual Futures?
Perpetual futures are derivative contracts that allow traders to speculate on the price of an asset without owning the underlying. Unlike traditional futures, they never expire, meaning positions can be held continuously.
How Do Perpetual Futures Work in Trading?
Perpetual futures rely on a mechanism called funding rate, which balances long and short positions. This ensures the perpetual contract price closely tracks the spot market.
Why Use Perpetual Futures in Investing?
Investors prefer perpetual futures because they:
- Provide leverage for a