Perpetual futures contracts are cryptocurrency derivative contracts, which do not have an expiration date, so it is called "perpetual". In the perpetual futures contract, traders can trade by predicting the rise and fall of cryptocurrency prices, so as to obtain income or take risks.
Perpetual futures contracts usually use margin trading, that is, traders need to deposit a certain amount of cryptocurrency or stable currency on the trading platform as a margin in order to bear losses in the transaction. The amount of margin depends on the regulations of the trading platform and the leverage selected by the trader. The higher the leverage, the lower the margin requirement, but the higher the risk.
Unlike futures contracts, perpetual futures contracts do not expire during the transaction process, but exist all the time. Traders can choose to open and close positions at any point of time according to their own wishes, and take advantage of fluctuating market prices to obtain income or take risks. At the same time, perpetual futures contracts will also introduce a funding rate mechanism during the transaction process to maintain the basic consistency between the contract price and the underlying asset price, and to encourage the participation of both long and short parties. Funding rates can be positive or negative, depending on how much the contract price is at a premium or discount to the price of the underlying asset.
There are certain risks in perpetual futures contract trading, which may cause traders to lose their margin. Therefore, before trading, traders need to conduct a full risk assessment and choose an appropriate trading contract according to their own risk tolerance and investment strategy.