Market Cap: $2.7097T 0.460%
Volume(24h): $73.2624B 44.630%
Fear & Greed Index:

24 - Extreme Fear

  • Market Cap: $2.7097T 0.460%
  • Volume(24h): $73.2624B 44.630%
  • Fear & Greed Index:
  • Market Cap: $2.7097T 0.460%
Cryptos
Topics
Cryptospedia
News
CryptosTopics
Videos
Top Cryptospedia

Select Language

Select Language

Select Currency

Cryptos
Topics
Cryptospedia
News
CryptosTopics
Videos

What are the differences between various currency-based perpetual contracts?

Perpetual contracts, a type of derivative contract with no expiration date and underlying cryptocurrencies, vary in important aspects such as margin requirements, leverage ratios, and funding rates.

Oct 23, 2024 at 02:54 am

What are the Differences Between Various Currency-Based Perpetual Contracts?

Perpetual contracts are a type of derivative contract that allows traders to speculate on the future price of an asset. They are similar to futures contracts, but there are some key differences.

1. Underlying Asset

The underlying asset of a perpetual contract is a cryptocurrency. This can be any cryptocurrency, such as Bitcoin, Ethereum, or Litecoin.

2. Expiration Date

Perpetual contracts do not have an expiration date. This means that they can be held indefinitely.

3. Margin

Margin is a deposit that traders must make in order to open a perpetual contract position. The margin requirement varies depending on the exchange and the cryptocurrency being traded.

4. Leverage

Leverage is a way to increase the potential profits of a perpetual contract position. However, it also increases the risk of losses. The leverage ratio varies depending on the exchange and the cryptocurrency being traded.

5. Funding Rate

The funding rate is a fee that is paid by traders who are holding a perpetual contract position that is in the opposite direction of the market. The funding rate is designed to keep the price of the perpetual contract in line with the spot price of the underlying asset.

6. Trading Fees

Trading fees are a fee that is charged by exchanges for executing perpetual contract trades. The trading fee varies depending on the exchange and the cryptocurrency being traded.

7. Contract Size

The contract size is the number of units of the underlying asset that are represented by each perpetual contract. The contract size varies depending on the exchange and the cryptocurrency being traded.

8. Liquidity

Liquidity is a measure of how easy it is to buy or sell a perpetual contract. The liquidity of a perpetual contract depends on the volume of trading on the exchange.

9. Risk

Perpetual contracts are a risky investment. The price of cryptocurrencies can fluctuate rapidly, and traders can lose their entire investment.

10. Tax

The tax treatment of perpetual contracts varies depending on the jurisdiction in which the trader resides. In some jurisdictions, perpetual contracts are taxed as capital gains, while in other jurisdictions they are taxed as income.

Disclaimer:info@kdj.com

The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!

If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.

Related knowledge

How does the insurance fund of Coinbase Contracts work?

How does the insurance fund of Coinbase Contracts work?

Mar 17,2025 at 11:06pm

Key Points:Coinbase Contracts' insurance fund is designed to protect users from losses due to smart contract exploits or platform failures.The fund is not explicitly detailed in terms of size or composition, leading to some opacity.Contributions to the fund are likely derived from Coinbase's operational profits or a percentage of trading fees.The fund's...

What cryptocurrency trading pairs does Coinbase Contracts support?

What cryptocurrency trading pairs does Coinbase Contracts support?

Mar 17,2025 at 09:24pm

Key Points:Coinbase Contracts currently only supports trading pairs involving Bitcoin (BTC) and USD Coin (USDC). This is a limited selection compared to other derivatives exchanges.The limited number of pairs reflects Coinbase's cautious approach to offering derivatives, prioritizing user safety and regulatory compliance.While more pairs may be added in...

How to create a new contract transaction on the Coinbase platform?

How to create a new contract transaction on the Coinbase platform?

Mar 17,2025 at 08:43pm

Key Points:Coinbase doesn't directly support the creation of arbitrary smart contracts. It primarily focuses on buying, selling, and holding established cryptocurrencies.To interact with smart contracts, you'll need a compatible wallet and potentially a decentralized exchange (DEX).Understanding the specific smart contract's requirements (e.g., network,...

How to set risk limits in OKX contracts?

How to set risk limits in OKX contracts?

Mar 17,2025 at 07:42pm

Key Points:Understanding OKX's risk management tools is crucial for safe contract trading.Setting appropriate risk limits involves defining position size, stop-loss orders, and take-profit orders.OKX offers several features to assist in managing risk, including margin level alerts and automated liquidation protection.Careful planning and adherence to a ...

What is the difference between the mark price and the latest price on Binance Futures?

What is the difference between the mark price and the latest price on Binance Futures?

Mar 17,2025 at 02:36pm

Key Points:Mark Price: A fair price calculated using multiple exchanges' prices, minimizing manipulation. It's crucial for funding rates and liquidation calculations.Latest Price: The most recent trade price on Binance Futures. Subject to volatility and potential manipulation.Discrepancies: Differences arise due to market depth, order book imbalances, a...

How to set stop-loss and take-profit on Binance Futures?

How to set stop-loss and take-profit on Binance Futures?

Mar 17,2025 at 08:48pm

Key Points:Understanding Binance Futures trading and its inherent risks.Defining stop-loss and take-profit orders and their importance.Step-by-step guide on setting stop-loss and take-profit orders on the Binance Futures platform.Exploring different order types available for risk management.Addressing common misconceptions and potential pitfalls.Examini...

How does the insurance fund of Coinbase Contracts work?

How does the insurance fund of Coinbase Contracts work?

Mar 17,2025 at 11:06pm

Key Points:Coinbase Contracts' insurance fund is designed to protect users from losses due to smart contract exploits or platform failures.The fund is not explicitly detailed in terms of size or composition, leading to some opacity.Contributions to the fund are likely derived from Coinbase's operational profits or a percentage of trading fees.The fund's...

What cryptocurrency trading pairs does Coinbase Contracts support?

What cryptocurrency trading pairs does Coinbase Contracts support?

Mar 17,2025 at 09:24pm

Key Points:Coinbase Contracts currently only supports trading pairs involving Bitcoin (BTC) and USD Coin (USDC). This is a limited selection compared to other derivatives exchanges.The limited number of pairs reflects Coinbase's cautious approach to offering derivatives, prioritizing user safety and regulatory compliance.While more pairs may be added in...

How to create a new contract transaction on the Coinbase platform?

How to create a new contract transaction on the Coinbase platform?

Mar 17,2025 at 08:43pm

Key Points:Coinbase doesn't directly support the creation of arbitrary smart contracts. It primarily focuses on buying, selling, and holding established cryptocurrencies.To interact with smart contracts, you'll need a compatible wallet and potentially a decentralized exchange (DEX).Understanding the specific smart contract's requirements (e.g., network,...

How to set risk limits in OKX contracts?

How to set risk limits in OKX contracts?

Mar 17,2025 at 07:42pm

Key Points:Understanding OKX's risk management tools is crucial for safe contract trading.Setting appropriate risk limits involves defining position size, stop-loss orders, and take-profit orders.OKX offers several features to assist in managing risk, including margin level alerts and automated liquidation protection.Careful planning and adherence to a ...

What is the difference between the mark price and the latest price on Binance Futures?

What is the difference between the mark price and the latest price on Binance Futures?

Mar 17,2025 at 02:36pm

Key Points:Mark Price: A fair price calculated using multiple exchanges' prices, minimizing manipulation. It's crucial for funding rates and liquidation calculations.Latest Price: The most recent trade price on Binance Futures. Subject to volatility and potential manipulation.Discrepancies: Differences arise due to market depth, order book imbalances, a...

How to set stop-loss and take-profit on Binance Futures?

How to set stop-loss and take-profit on Binance Futures?

Mar 17,2025 at 08:48pm

Key Points:Understanding Binance Futures trading and its inherent risks.Defining stop-loss and take-profit orders and their importance.Step-by-step guide on setting stop-loss and take-profit orders on the Binance Futures platform.Exploring different order types available for risk management.Addressing common misconceptions and potential pitfalls.Examini...

See all articles

User not found or password invalid

Your input is correct