What Are Perpetual Contracts?
Perpetual contracts are a unique type of derivative agreement where two parties trade a specific asset at a predetermined price and date. Unlike traditional futures, these contracts have no expiry date, allowing traders to hold positions indefinitely while leveraging market opportunities without worrying about rollover costs.
Key Features of Perpetual Contracts
- No Expiration: Trade without time constraints.
- Leverage Trading: Amplify positions with borrowed capital (margin trading).
- Cash Settlement: No need to own the underlying asset—settlements occur in cash.
Advantages of Perpetual Contracts
- Accessibility: Enter crypto markets without holding physical assets.
- Capital Efficiency: Trade with margin (e.g., 10% of contract value).
- 24/7 Market: Crypto perpetual contracts operate continuously.
👉 Discover advanced trading strategies to maximize your positions.
How Perpetual Contracts Work
Core Components
| Component | Description |
|---|---|
| Margin | Initial, maintenance, and risk margins protect against volatility. |
| Funding Rate | Periodic payments (every 8 hours) aligning contract prices with spot rates. |
| Liquidation | Automatic closure if margin falls below requirements. |
Safety Measures
- Top-Tier Security: Exchanges like Bitget rank among the safest (CER Top 10).
- Regulatory Compliance: Licensed in strict jurisdictions (e.g., Singapore, USA).
FAQs
Q: Can perpetual contracts lose value?
A: Yes—price fluctuations and leverage risks may lead to losses.
Q: How is the funding rate calculated?
A: Based on the gap between contract and spot prices; paid by longs or shorts.
Q: What’s the minimum margin?
A: Varies by exchange (e.g., 1–5% of position value).
Conclusion
Perpetual contracts offer flexibility and leverage for crypto traders. By understanding margin, funding rates, and risk management, you can navigate this market effectively.
👉 Start trading perpetual contracts today with a trusted platform.
### Keywords:
- Perpetual contracts
- Crypto leverage trading
- Funding rate
- Margin trading
- Cryptocurrency derivatives
- Bitget security
- OKX exchange