First of all, let's explain what futures contracts are? A futures contract is an agreement whereby the buyer agrees to receive an asset at a specific price after a specified period of time, and the seller agrees to deliver an asset at a specific price after a specified period of time. Both parties agree that the price used in future transactions is called the futures price. The designated date on which both parties must conduct transactions in the future is called the settlement date or the delivery date.
The perpetual contract is a new and unique contract. The goal of the contract is to allow the market situation of the spot market to be copied under the condition of high leverage. The contract will not be delivered and will be able to keep up with the reference price index through various mechanisms. This contract evolved from the traditional futures contract, but the perpetual contract has more obvious advantages and greater risks than the traditional futures contract. Because it is difficult for digital currency to price accurately, contracts that are far away from the delivery date generally reflect market expectations in the form of the price difference between spot and futures. The spot price is higher than the futures contract price, and investors are generally not optimistic about the futures market. The spot price is lower than the futures contract price, and investors are generally optimistic about the futures market. Of course, the price difference only reflects market sentiment. What can really change the futures contract price is the rise and fall of the spot price.
Perpetual Contract: A type of Futures Contract which doesn’t have an expiration date or settlement.
Unlike contracts on the traditional Spot Market, which are traded at a specific time at the specific price, in Futures, two parties will make a trade on the contract with a settlement on a future date and a specific price. Perpetual Contract is a type of Futures Contract that doesn’t have an expiration date or settlement. BTCMEX offers Bitcoin Perpetual Contracts, which allows traders to keep their positions open for as long as they want.
One of the advantages of crypto derivatives trading is you can open both Long and Short positions on the exchange.
Let’s see how the contracts work on the Exchange. For example, you purchase a Perpetual Contract for the BTC/USD pair. If you Long (buy) and the Bitcoin price rises, you make a profit at the end of the contract, while you would suffer a loss if the price drops. On the contrary, if you Short (sell) and the BTC price falls in value, you would make a profit but would suffer a loss if the price rises.
BTCMEX.com is currently offering Bitcoin Perpetual Contracts with up to 100x Leverage, a speed of 100,000 TPS, hundreds of APIs, diverse Order Types, and 24/7 localized live multilingual Customer Support.
In crypto Margin trading, Leverage is an important feature and the main profit-making instruments used while trading Bitcoin Perpetual Contracts. Learn everything about Leverage and Margin trading in the BTCMEX official Trading Guide.
BTCMEX Perpetual Contract Details
Perpetual Contract Trading Fees
The Trading fee of BTCMEX perpetual contract products is divided into two directions: Maker and Taker. The “Maker” provides market AddedLiquidity and the “Taker” provides market Removed Liquidity.
Maker : -0.025%, pay for AddedLiquidity
Taker : 0.075%, pay for AddedLiquidity
Trading fee is charged based on the position value, irrespective of the Leverage.
Again, there is no 100% winning strategy, especially in the short term. It is not recommended to trade blindly. The strategy of making a 100% profit without loss is to be an agent, you can simply sign up through here and earn consistent profit by introducing your friends to trade at BTCMEX.
Please note, that the article is a part of BTCMEX Blog, the views and opinions expressed here are the contributing author’s only, and do not necessarily represent the views of the company.
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